Preamble

The House met at Ten o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Orders of the Day — POST OFFICE

Order read for resuming adjourned debate on Question [15th March]:
That the Postmaster General be authorised, as provided for in section 5 of the Post Office Act 1961, to make payments out of the Post Office Fund in the financial year ending with the 31st March, 1968.—[Mr. Edward Short.]

Question again proposed.

10.5 a.m.

Miss J. M. Quennell: The weekly stories which I read as a child inevitably concluded at the most exciting point with the phrase in italics "to be continued next week", but I cannot pretend that my speech was amputated at its most exciting point. I would refresh the Assistant Postmaster-General's memory on the main points which I was putting.
First, I reminded the House that the Report was nearly a year out of date and pointed out our difficulty in that, although we could consider Post Office affairs, where they impinged on and were affected by British Railways, we could not summon the Chairman of the Railways Board to explain why the trains on which the Post Office relied were late.
Secondly, I talked of the training of Post Office staff, which is very important. In the coming few years the Post Office service, no matter what shape the Post Office takes, will be competing with an electronically developing industry for men of the desired qualifications. Thirdly, I tried to draw attention to the Post Office's difficulty in assessing in advance movements of population. I reminded the hon. Gentleman that there had been in existence some rudimentary form of liaison between planning authorities and the Post Office, which was clearly not working satisfactorily.
It might be worth while considering establishing this on some other basis. The Post Office might consider the feasibility study prepared by Professor Buchanan for development on the Solent, which envisages an increase in population of about 500,000 people in a greatly enlarged town. Although the demand for telephones in that area of Southampton may be of the order of hundreds at the moment, it will be hundreds of thousands if this develops. This exercise could be useful as a pilot study in assessing movements of population.
I also asked whether the Post Office or the Ministry of Defence would be responsible for the additional demand on telecommunications with the repatriation to this country of large numbers of troops under the Defence White Paper. Finally, I was cut off in mid-breath while talking of postwomen.
So much for the items which are detectable in the Report. Since this Report was published, the Select Committee on Nationalised Industries has published its Report, in which some of the queries which I have raised are mentioned. It may be that we shall be debating that Report, and I do not want to be out of order by anticipating that debate, but there are references to postwomen in that Report which are very serious and require a great deal of consideration. In the same way, there are references to British Railways. They, too, are very serious and require consideration by the Post Office.
On the subject of training, in the appropriate paragraph there is a reference to about 600 places being available to the Post Office in its own training establishment. There is no indication of the nature of those places. It does not say, for example, whether people are given sandwich courses, initial training or retraining.
Again, I do not anticipate any future debate, but I should like to comment on Chapter V, which is concerned with the Post Office Users' Council. This is the germ of an excellent idea. It is referred to in the White Paper on the Reorganisation of the Post Office, published only yesterday, which envisages its development. No doubt we shall be debating that at a later stage, but the Post Office Users' Council is something which, in the coming years, should be encouraged


and developed to the maximum extent. Below the national level, I should have thought that local Post Office advisory committees should also be encouraged in the coming years. The success of the Users' Council is a measure of the chances of eventual success in establishing a really effective body of users' consultative organisations when the Post Office is reorganised.
The importance of the Post Office lies in the fact that it is one of the rare Departments which every man and woman and practically every child comes to use in a way in which no other Government Department is used. Everyone has views about its efficiency or inefficiency, how it could be improved and how its services could be more useful to the public. There is a great public interest in the Post Office, and basically it has to be remembered that it has a much more human association than practically any other Government Department. At one stage, it is reaching for the stars. At another, it is coming into contact with people all over the country daily, and it always will.

10.14 a.m.

Sir John Gilmour: When the debate opened, a week ago, the Postmaster-General referred particularly to the fact that in rural areas postal charges hardly cover costs. In reply, I would say that, in rural districts, we get only about a quarter of the service which so many other parts of the country receive. I walked down Sloane Street this morning and, in a fairly short distance, I passed three or four pillar boxes which are emptied ten times a day. In the rural areas, there is one delivery a day. Having received a letter, if one wishes to reply, one has to wait until the next day before there is any opportunity to post a letter.
It was an unfortunate remark for the Postmaster-General to have made. The demands which rural services make on the Post Office are less than the high-cost operations in residential districts of London of emptying pillar boxes ten times a day.

Mr. R. F. H. Dobson: Is the hon. Gentleman aware that in some cases it costs 1s. 6d. to deliver a letter to a rural area, whereas it costs less than 4d. in an urban area?

Sir J. Gilmour: One can easily find examples. In Banffshire, for example, there are cases where a postman may travel 10 miles up a road to make one postal delivery. In such a case, costs must be very high. On the other hand, when one considers the facilities provided for the towns, the service provided to rural areas is poor.
In my part of Scotland, a postman delivers the mail and, half an hour later, he returns to collect letters from the local pillar box, to which one may have to go two or three miles. Someone like a farmer who is out during the day has no opportunities to post a reply to any letter which he receives until the next day. That is something which should be borne in mind.
My hon. Friend the Member for Howden (Mr. Bryan) mentioned last week the running of the railways and its effect on the Post Office. When one travels from Scotland and sees mail being unloaded at King's Cross station, it is apparent that it is still being handled in the same way as it was 50, 60 or 70 years ago. Increased postal charges are imposed when we have a worse service and see no efforts being made to mechanise the handling of mail in a big centre like King's Cross station. One feels that the reason why costs are rising is because the fundamental problem of mechanising the handling of mail in the big centres is not being tackled as energetically as it should be.
Yesterday, I had the experience of getting on a bus which goes from Dundee to Turnhouse to connect with the plane to London. A 32-seater bus was provided for two passengers. Is any attempt made by the Post Office to use this service 'to get mail from Dundee on to a plane and so deliver it to London in a shorter time?
During the past few weeks, I have had a good deal of correspondence with the Postmaster-General about decreased service all over the country, caused particularly by the closing of post offices in the lunch hour. From many burghs in my part of Scotland, I receive complaints that services are not available to people in the middle of the day when they have time off.
Recently, I wrote to the Postmaster-General explaining that many people


leave home before their local post offices are open. If they are unable to get to a post office during the lunch break, by the time they return home their local offices are closed again. In the case of single people living on their own who have no one to do errands for them, that can be a real hardship.
The Postmaster-General is always courteous in his replies, and in this case he said:
Most of these people work in the larger towns where post offices do not close at lunchtime and they should, therefore, have no difficulty.…
He can have no knowledge of conditions in my part of Scotland, where people from small villages travel 15 to 20 miles to work in the county town, where the post office closes in the middle of the day. By the time they get home again at night, their local offices are closed. Fortunately, those sub-postmasters who run post offices in connection with their own businesses do not think highly of the Postmaster-General's order to close in the middle of the day. Many of them remain open and provide a service.
What many of my constituents complain about is that postal charges have gone up when the service which they receive has gone down. There is a proposal in my part of the world to close down the Crown office in Leven and substitute it with a sub-post office. At the same time, when I write to the Postmaster-General to ask for sub-post offices to be kept open and for others to be reopened, the reply I receive is that this is too expensive and, therefore, people must travel to the main centres to get postal facilities. As a result, the public have a real grouse about postal services.
I have not yet had time to study fully the White Paper published yesterday, but I had noticed the large headline in page 6:
Safeguards for The Users.
It states:
The Bill will require the Corporation to consult the Council about ail major proposals affecting its main services, in so far as these affect users.
I very much hope that the Post Office's present actions can be examined.
While postal services from country districts to centres of population are fairly good, the inter-rural services are far from effective. I had a very good illustration of this the other day. On

Sunday, 12th February, I posted a Valentine card, hoping that it would be delivered to my wife on St. Valentine's Day. The card did not arrive until the day after St. Valentine's Day, which meant that it took from Sunday to Wednesday to go 18 miles, and I was deprived of the pleasure of the card being delivered on the correct day. Such an instance shows that a great deal can still be done to improve the postal services.
I have always found head postmasters and postmen in my constituency work very hard on our behalf, and we are extremely grateful to them. In winter, they sometimes have to plough through snowdrifts to deliver the mail. It is not the hard work of those who deliver the mails of which we have cause to complain. The complaint is that there is not enough drive and direction in reorganising the Post Office to bring it up to modern standards.

10.22 a.m.

Mr. R. F. H. Dobson: I was interested to hear the St. Valentine's Day dilemma of the hon. Member for Fife, East (Sir J. Gilmour). It conjured up pictures of how he tackled the problem and to whom he wrote about the delay, but in any case his wife probably does not know from whom the card came. Much of what he said about charges having gone up and services having gone down is probably very representative of general opinion. If he closely reads the Report on the Post Office made by the Select Committee on Nationalised Industries, he will probably agree that note should be taken of one or two references to causes. Let us hope that the new Corporation will also take note of them.
The hon. Lady the Member for Peters-field (Miss Quennell) quite rightly said that the Post Office is close to the public. It is estimated that over half a million people are employed, and when we add to that figure the families of those workers we have a very large section of the public closely associated with postal work.
I was a little bothered by what the Postmaster-General said last week about the interim set-up on the managerial side. I realise that he was talking about the highest posts—the Director-General, Deputy Director-General and Engineer-in-Chief posts, as they now are—but I


should like more information about what is to happen at the regional level, which poses a different problem. As I understand, my right hon. Friend may well be getting to the point of having two regional directors instead of one, or at least having one on the postal side and one dealing with telecommunications. That might be good from one point of view, but might be difficult from the organisational point of view.
Under what authority will those in what is called the common services departments—people like safety officers and public relations officers—work? It is not easy to split up their work too strictly, and decide under which part of the hierarchy they will operate. If the Postmaster-General carries these ideas too far, he may be in some difficulty. Will he, therefore, give us some more information on this aspect, and also bear in mind the obvious organisational difficulties that will crop up if he follows the McKinsey recommendations too far?
I hope that the new Corporation's regional boundaries will conform to those of the economic development councils. There are now 16 public Corporations, all with varying areas, and this makes it extremely difficult for the economic development councils to work in with them. If we feel that public investment has some bearing on regional economics, the Corporation's regional set-up will provide an opportunity to make sure that at least the Post Office boundaries line up to some extent with those other regional boundaries we hope to have in the future.
Last week, the hon. Member for Howden (Mr. Bryan) said:
I dare say there are many lazy people doing full-time work, but there are very few lazy people doing part-time work."—[OFFICIAL REPORT, 15th March, 1967; Vol. 743, c. 445]
That may be a truism, but it is far too generalised to be of any use. I put it quite seriously to the hon. Gentleman—I am sorry that he is not here at the moment—that in the Post Office there is a very large area of expertise. For the very intricate second-level sorting or delivery work, we must, if we are to have part-time staff, have experienced part-time staff, but I am sure that it is accepted by the Post Office that, in the main, for such work one is probably better off

with full-time staff, all of whom have the necessary background and the expert knowledge of the way in which mails are handled.
The power to engage part-time staff already exists. Under present agreements, part-time staff can be employed without any consultation with the unions concerned when the vacancy figure in London goes above 5 per cent. No such figure exists for the provinces. A large number of regular part-time staff work on the telephone side, but they are regular part-timers, trained to do the job for certain periods of the day when pressure builds up. That is where the difference lies. The Post Office has a very good record in this respect, and if there are one or two lazy people employed, I am sure they are very few in number, because the organisation soon weeds them out.
The Select Committee's Report brings out very clearly the fact that if we do not get our tariffs right in relation to total costs we are in trouble. It also brings out very clearly that there have been many instances over the years when the political situation has meant that the Postmaster-General of the day has not been able to persuade this House or the Cabinet to increase charges when the need has been there. I hope that we will now see a much firmer line taken in that respect, because it will make a great deal of difference and meet the point, made also by some hon. Members opposite, that capital investment is vitally needed on the postal side but has been deliberately cut down because there has been no opportunity to vote the money necessary for capitalisation there, although it has been available much more readily on the telephone side.
It is interesting to read in the Select Committee's Report the suggestion that we can have a much different type of contract, in terms of return on capital, on the postal and on the telephone sides. Most of us would be agreeable to that, because it is realistic. I cannot see it in 50 years' time, even when we can so mechanise the postal side so that we can get the capital return that we need in exactly the same way as on the telephone side.
There is a different problem on costs, which I thought might be mentioned in


the White Paper on Post Office Prospects and it is what might happen if we adopt decimal currency. One of the problems for the Post Office would be the translation of the present money rates into new money rates, which would mean an increase in postal costs. This is the effect of a change in the system which, while it might be wholly acceptable, should be realised now.
Perhaps I can give two examples. The one new penny will be worth a halfpenny which means, in future 1·2 of a penny. Immediately there is a price increase for every penny spent before. if it is translated to 4d., the new 4d. stamp becomes 4·8 per cent. of a penny, very nearly 5d. If one does the same thing on the telephone serice there will be figures showing nearly 7d. for a telephone call instead of the previous 6d., although one would presumably be putting in a 6d. piece to get the same call.
It will also cause difficulty in dealing with change at Post Office counters. Millions of pounds cross the counters—

Mr. Speaker: Order. The hon. Gentleman must not anticipate this afternoon's debate.

Mr. Dobson: I will endeavour to stick more closely to the prospects of the Post Office. I was trying to show that some of the things which I thought might be in the White Paper had not been included. I appreciate why this is and why we ought not to talk too much about it now.
The White Paper dealing with the reorganisation of the Post Office, which came out yesterday, mentioned two things. One was the conditions of service, laid out in a loose form in paragraph 50 on page 11. This indicates that negotiations can begin soon on conditions of service, as soon as the Corporation is set up. I think that is what it means but I wonder whether it means that, as soon as the Corporation is in being, whether or not it is set up, we should allow negotiations to go on about conditions of service.
This is a very important point, because there are many conditions of service wholly to do with civil service conditions. I am glad to see that the hon. Member for Manchester, Openshaw (Mr. Charles R. Morris) is in his seat, because I know that he agrees with me in this. It is

important that the conditions of service should be clear. There is also the position about superannuation. It is necessary to make this matter very clear. I accept that the change-over to Corporation would probably mean that no public servant could be worse off. I hope that at the same time we will have some transferability between the Corporation and perhaps other Corporations.
Those who have the privilege to serve the Post Office do so quite willingly, knowing that in that public service, from time to time, they get a lot of complaints, for which they are not personally responsible. This goes for all people, from those handling the mail and telephone calls to the managerial side of the Post Office. I hope that we shall see further improvement in Post Office conditions in the light of the very detailed examinations which have recently taken place.

10.35 a.m.

Mr. Philip Goodhart: One aspect of Post Office accounting which has caused profound irritation to a number of my constituents is the provision, introduced in the measures of 20th July last, for the charging of one year's rental in advance for telephones for new subscribers. What has caused the irritation is that this has been interpreted by the Post Office in dealing with new subscribers to mean an old subscriber who has changed his address, even within the same telephone exchange area.
People who have been subscribers for five, 10 or 15 years, find themselves being charged a year's rental in advance when they have moved house. I have written to the Postmaster-General on a number of occasions and I have asked questions in the House about this. I have been told that there is some extra cost to the Post Office when a subscriber changes his address.
Plainly, the extra charge falling on the Post Office is not nearly as much as the charge for installing a completely new telephone. I cannot believe that it is right to interpret the measures of 20th July so widely that they hurt and irritate this small group of people who have been valuable subscribers for many years, and who are placing no real additional burden upon the Post Office.

10.36 a.m.

Mr. Ian Gilmour: I trust that the Assistant Postmaster-General has taken note of what my hon. Friend the Member for Beckenham (Mr. Goodhart) has said about the Post Office putting a quite unjustifiable interpretation on the word "new" and that he will agree that these old subscribers should not be charged in that way. One advantage of the Government making important statements last week, and of this debate dragging on over a week, is that there has been time to consider the Postmaster-General's speech of last week.
It was a good deal better than the White Paper. The Postmaster-General showed zeal for commercial principles which he does not always show in other matters. At one moment, he was so carried away that he referred to his hon. Friend as his deputy chairman. This is an encouraging sign for the future of Post Office management.
The Post Office White Paper did not sound a very hopeful note. It exudes the feeling, "Thank heavens for the squeeze. This gives us a breathing space. Now we can catch up. The Post Office will really come into its own because we have a nice squeeze and this is all very good for us." That is all very well, but it is not a very encouraging prospect when the economy deflates, because the Post Office will not necessarily be in such a good position.
Paragraph 11 of the White Paper says:
The waiting list has been more or less steady since the measures of July, 1966.
That is true, but the waiting list is over 120,000, which is twice as much as it was last year, and nearly three times as much as it was two years ago.
We all hope that there will be an improvement in postal services, particularly in rural areas, as my hon. Friend the Member for Fife, East (Sir J. Gilmour) said. Presumably, the Postmaster-General has received expert advice that a slogan like "Quality and Reliability Year" will be helpful in improving services. I hope that he is right. This type of slogan is rather reminiscent of Chinese wall papers and poster slogans. It reads slightly like one of those earlier and more attractive thoughts of "Chairman Short". I hope that it will be of some use. It does not seem to be a very sophisticated

technique in bring about an improvement in services.
Paragraph 34 of the White Paper says this:
Buildings. It is hoped to start 40 new post offices and 20 new sorting offices during the year.
This slightly reminiscent note struck a bell in my ear. Paragraph 30 of last year's White Paper says this:
It is hoped to start building about 40 new post offices and 20 new sorting offices during the year.
The caution evident in the inclusion of the word "about" in last year's White Paper was reasonable. After the debate on 20th January the Assistant Postmaster-General wrote to me, in response to a query I had raised in the debate, saying that he hoped that 42 postal buildings would be started during this year, of which there would be 33 post offices and 9 sorting offices.
I hope that the hon. Gentleman will tell us whether paragraph 34 in this year's White Paper bears any relation to paragraph 30 in last year's White Paper and whether it is proposed to catch up on what was not done last year, or whether, as I imagine, it is separate and the Post Office is starting again.
The first sentence in the final paragraph of the White Paper is disturbing:
The fall in return on capital now in prospect for 1967–68 is disturbing".
The next sentence is almost more disturbing:
The Post Office is confident that despite the temporary downturn in growth rate, the telecommunications business is an expanding industry with a bright future.
This is an extraordinary way of putting things. It reads rather like the Rural Industries Association making an interim report about basket work manufacturers. No one would gather from this sentence that telecommunications is the world's biggest growth industry. To treat it as if it were a type of cottage industry slightly suffering from a downturn, or from a blight in a rural area, is out of scale with events.
The speech of the Postmaster-General was slightly less discouraging than the White Paper, because the right hon. Gentleman showed some grasp of the opportunities and of the need of a longer and deeper vision. I hope that the Post Office realises the vast potentialities of


this industry and appreciates that it is vitally important for the whole future of the country.

10.43 a.m.

The Assistant Postmaster-General (Mr. Joseph Slater): The hon. Member for Norfolk, Central (Mr. Ian Gilmour) has referred to the postal building programme. Ever since I came to the Post Office, two and a half years ago, this has been one of the aspects of the Post Office about which I have been disturbed, because of the lack of capital investment for the development of new buildings. Some of our buildings are antiquated. We have been going ahead as fast as possible trying to replace them. This will be our attitude in regard to building development. The hon. Gentleman said that telecommunications is an expanding industry. He is right, and we are as far in front as any other country.
I want to convey my right hon. Friend's apologies to the House for not being present this morning. He would very much have liked to have heard the rest of the debate, but, unfortunately, urgent Government business has detained him.
We have had a very interesting debate and I am grateful for the criticisms and suggestions which have been made by hon. Members on both sides. In particular, I much enjoyed the wise counsel of my hon. Friend the Member for Poplar (Mr. Mikardo). The whole House, and especially my right hon. Friend and myself, are indebted to my hon. Friend and his colleagues for the Report of the Select Committee on Nationalised Industries on the Post Office. It is an invaluable Report, which the Government are studying with the greatest of care.
In the White Paper which was published yesterday, and which has been referred to, in passing, by hon. Members, the Government have, after considering the Select Committee's Report, set out their proposals for the reorganisation of the Post Office. I am sure that the House will not expect me to deal today with the more technical recommendations in the Report. We are studying them very closely and perhaps we might return to the matter on a future occasion.
Last Wednesday, the hon. Member for Howden (Mr. Bryan) asked whether there would be a debate on the White Paper and the Report of the Select Committee. My right hon. Friend has brought the suggestion to the notice of the Leader of the House. If any debate on the reorganisation White Paper is to be joined with a discussion of the Report from the Select Committee on Nationalised Industries, I imagine that it would be for the convenience of the House not only to have a reasonable interval in which to consider the White Paper, but also to be able to refer to the evidence given before the Select Committee, which has not yet been published.
The hon. Member for Howden also referred to uncertainty which must affect everybody at this time when the conditions of service in the Corporation have still to be settled. I am pleased that the hon. Gentleman drew our attention to this. We shall be continuing our discussions with the staff, but this will take time, and some points may have to await the setting up of the Corporation. We have covered this point in the assurances to which the hon. Gentleman referred and which are recorded in the White Paper published yesterday.
I will not weary the House by repeating them, but they cover four major issues: first, the position up to vesting day, in which it is made clear that during this period the staff, being civil servants, will have access to the Civil Service Arbitration Tribunal in certain cases; secondly, the position if revised conditions of service have not been negotiated by vesting day; thirdly, security of tenure; and, fourthly, superannuation.
On this last one, I would like to emphasise that we have made it quite clear that existing civil servants will be entitled to choose to have the benefits they would have enjoyed under the Civil Service superannuation scheme if they had not been transferred to the Corporation.
These assurances were the subject of lengthy discussions with the negotiating committee set up by the two departmental Whitley Councils and agreed with them. The other staff associations were also consulted. I am certain that these assurances to which the Government are committed should have allayed any worries the staff may have felt.
The hon. Gentleman also asked about the timetable. This will depend upon the passage of the Bill through Parliament, but my right hon. Friend hopes that the Second Reading will take place before the end of 1967 and that, with favourable winds, the Royal Assent should be before the Summer Recess of 1968. If we achieve this timetable, vesting day is likely to be 1st April, 1969.
The hon. Member for Howden raised a number of detailed points other than those arising from the Select Committee's Report, and I hope that he will accept that I should not attempt to deal with them today. He asked whether we had any report to confirm British Railways' hope that electrification and rerouteing would produce improved punctuality by March, 1967. I know how hon. Members feel about the delay of mail. On the evidence of the first fortnight, there has been a decided improvement. That is the information I have, though it is too early to come to a definite conclusion.
The hon. Member also made some play about "Quality and Reliability Year", which started last October. At that time about 92 per cent. of fully-paid letters were being delivered on the first working day after posting. My right hon. Friend recently told the House that that figure has now improved to 93 per cent.
The hon. Gentleman mentioned the mechanisation experiment at Norwich. The trials of the new coding desks and automatic letter sorting machines there have not yet been completed because of delay in manufacturing some of the equipment. It would be premature to issue a report on those trials while they are still under way, but I shall bear it in mind. If the Norwich scheme is a success, we shall embark on the programme to which my right hon. Friend referred in his opening speech.
As a Yorkshire Member, the hon. Gentleman also mentioned Leeds City station. We are planning, a new head post office for Leeds, and the idea of putting a sorting office over Leeds City station is only one of a number of possibilities we are examining.
The hon. Member for Petersfield (Miss Quennell) made an interesting speech. I was interested in the research she had undertaken. I may not have time to deal with all the points she raised. First, I

can assure her that all the computers we are ordering are of British manufacture. I can also assure her that the Post Office accepts full responsibility for the training—and retraining where necessary—of its staff. We have nearly 100 training establishments in various parts of the country.
The hon. Lady referred to telephones for Servicemen and their families coming back to this country. My Department has consulted the Ministry of Defence about this, and I am glad to say that we do not think that this will prove to be a very great extra demand on our resources.
The hon. Lady also mentioned post-women. We do have an agreement with the unions for employing postwomen on a temporary basis in places where there is a shortage of postmen. We employ about 1,000 women full-time and 6,400 part-time. My right hon. Friend is examining proposals for the admission of women to established posts on the same basis as men, but I cannot say more about that today.
The hon. Member for Fife, East (Sir J. Gilmour) referred to lunch hour closing of post offices. I think that I remember seeing him during the recent Adjournment debate on the subject of post office closing hours raised by my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter). Unfortunately, the hon. Gentleman was unable to get into the debate, in which I tried to set out the reasons why we have had to reduce the hours of service.
I do not want to go over all the points I made then. But we close at lunch time only where we have found that there is little demand and where there will be little inconvenience. In general, we only match the practice of local shops which also close at lunch time, and the service we give is still better than that of the banks and certain public authorities. The revised hours enable us to improve the working day of our counter clerks, which should enable us to recruit more successfully.
On another point raised by the hon. Member for Fife, East, he should be aware that over the country as a whole service in the rural areas is subsidised by that in the urban areas. My right hon. Friend has said more than once that he is giving special attention to mechanisation of the postal services, and


he has put in hand a considerable programme under which £45 million will be invested over the next 10 years.
My hon. Friend the Member for Bristol, North-East (Mr. Dobson) spoke of the effect of changes in management in the regions. As my right hon. Friend said last week, the present all-purpose regional organisation will be split in most cases. This is largely a matter of growth; many of the present regions are becoming very large units to manage, and the precise details of how the split will be made will take a little while to work out. We are aware of the problems, such as that of safety officers, which my hon. Friend mentioned.
The matter of costs was also raised by the hon. Member for Fife, East. My right hon. Friend has made it abundantly clear that it is imperative that the gross imbalance in Post Office charges be put right if the finance of the two great services are to be developed on a sound footing. I emphasise that my right hon. Friend has also said that before he looked at the question of tariffs he wished to put the expenditure side of the balance sheet right by making every effort to improve the efficiency of the services, and he has put in hand a productivity improvement programme to that end. I hope that that will help to reassure the House that my right hon. Friend intends that the Post Office should continue to give the best possible service at the cheapest prices consistent with sound financial policy.
The hon. Member for Beckenham (Mr. Goodhart) reminded the House of the correspondence he has had with my right hon. Friend and the Questions he has asked about the one year's rental now paid in advance on ordering a telephone, instead of one quarter's. He suggested that that should apply to those taking the telephone for the first time, and not to existing customers moving to new premises, particularly if a telephone is already there. Naturally, I have some sympathy with that point of view, but we must face the fact that such orders consume resources and, therefore, for the present the new rental arrangements must apply generally. They entail the payment of nine months' extra rental in advance and when the initial payment has been made—absorbing purchasing power—no further payments fall due for a

year, when quarterly payments again apply.
Finally, I thank hon. Members again for their reception of the Motion. The coming year will be a challenging one in the Post Office. My right hon. Friend announced when opening the debate a change in the organisation of the management and structure which will help the transition from a Government Department to a public corporation. The coming year will see that process well on its way. I am confident that the staff of the Post Office will prove equal to the challenge that confronts them.

Question put and agreed to.

Resolved,
That the Postmaster General be authorised, as provided for in section 5 of the Post Office Act 1961. to make payments out of the Post Office Fund in the financial year ending with the 31st March 1968.

Orders of the Day — LOCAL GOVERNMENT (SOLENT FORTS)

Order read for resuming adjourned debate on Question [8th March].
That the Isle of Wight and Portsmouth (Solent Forts) Order 1967, dated 9th February, 1967, a copy of which was laid before this House on 16th February, be approved.

10.59 a.m.

Question again proposed.

Mr. Mark Woodnutt: When we adjourned the debate, a fortnight ago, I was in the middle of making a purely academic point. I was saying that Article 2 of the Order purports to set out the Order's purpose. In fact, it deals with the register of electors, lists of jurors, local government elections, valuation lists and expenditure by local authorities. But the main purpose of the Order, which is to bring St. Helen's Fort and No Man's Land Fort within the boundaries of the County of the Isle of Wight, and Spitbank Fort and Horse Sand Fort within the boundary of the City of Portsmouth is not mentioned as the main purpose.
It is true that that intention is set out in the preamble to the Order. But even so it is stated that the Order arises from a request of the Isle of Wight County Council and the Portsmouth City Council, when we all know that the request originates from the Ministry of Housing and Local Government.
The local authorities concerned have given much thought to the proposals before agreeing to them. The Isle of Wight County Council referred them back to the appropriate committee because it was not happy about the responsibilities it might suddenly find itself with when these forts were brought within its boundaries. Neither the county council nor the Ryde Borough Council particularly want the forts within their boundaries and I hope that the Minister will be able to give an assurance that they will not become a burden on the Island's ratepayers and that, if the Ministry of Defence does not dispose of them, they will be eventually dismantled.
Having said that, I support the Order as a tidying-up operation, which is wise, and would merely make the point that I wish that, in such orders, the main purposes were not obscured by consequential matters. It should also be made clear from which source such Orders emanate. This is a sensible piece of legislation. At the moment, these forts, which were built over 100 years ago when the Government of the day feared invasion by Napoleon III, are in a sort of local authority no man's land. They do not come within the boundary of any local authority but neither are they outside territorial waters. I can see one of them from my bedroom window.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The hon. Gentleman is lucky.

Mr. Woodnutt: I agree.
The Defence Ministry is intending to dispose of the forts and clearly planning control and the various other matters arising from private ownership must come within the jurisdiction of some local authority. For this reason, I support the Order.
But there is another reason for my support. My constituents, the lusty Vectensians, who are thankful now that their name of Vectus is not to be given to a fort, are natural democrats and view with considerable alarm the totalitarian tendencies of the Government. They are considering seriously a unilateral declaration of independence for the Isle of Wight.

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman cannot make a unilateral declaration of independence on this Order.

Mr. Woodnutt: I was not actually intending to make the declaration now, Mr. Deputy Speaker. We are thinking of doing that some time later in the year when these forts are in our possession.

Mr. Kenneth Lewis: If that unhappy day should come, the County of Rutland would be glad to join with the Isle of Wight. Then these two small "countries" could join the Common Market and sit in the United Nations.

Mr. Woodnutt: Rutland would be a welcome ally. May I add how much I admire my hon. Friend's voice in this matter. I am coming back to the Order, Mr. Deputy Speaker.
It is interesting to note that the construction of these forts was originally demanded for the defence of Portsmouth against an invasion by Napoleon III 100 years ago. Their construction was recommended in the Report of a Royal Commission set up by Lord Palmerston and published as a White Paper in 1860. It made various recommendations of how best to secure the fortifications of the chief military and naval ports in Britain. Forts on the shoals had been proposed two or three years before, but it was as a result of the Royal Commission's recommendations that these forts and others were built. The cost of the new fortifications to the whole nation—including the four contained in this Order—was £11·8 million.
Lord Palmerston, then an old man, had repeatedly announced that his two remaining objectives in life were the repression of the last remnants of the trade in negro slaves and to leave Britain in a proper state of defence. He was determined that this £11·8 million should be spent, such was his fear of Napolean III. But Mr. Gladstone, then the Chancellor of the Exchequer, was, as most Chancellors of the Exchequer would be, dead against the project. Many times Mr. Gladstone threatened to resign over the question and, finally, Lord Palmerston wrote to Queen Victoria:
It is better to lose Mr. Gladstone than to lose Portsmouth.


The forts were built. They have never been any use then or since and that must give some encouragement to those hon. Members on the back benches opposite who violently opposed the "master of foxhounds" a few weeks ago on the size of defence expenditure.
I have one minor criticism of the Order to make. It is about the local authority areas into which these forts are being put. St. Helens Fort is nearer Bembridge than St. Helens and Spitbank Fort is nearer Gosport than to Portsmouth. Possibly, the Minister has been misled by the name "St. Helens Fort". It would have been tidier to have incorporated it in the Isle of Wight Rural District Council rather than in the Borough of Ryde and to have had Spitbank Fort in Gosport rather than in the City of Portsmouth. But I will not quarrel with that. The main point for the Isle of Wight is that it will now have two bastions of defence if they are not developed as casinos or as top security prisons. They may fulfil their original purpose yet.

11.9 a.m.

Mr. David Webster: I would not want to interfere in what might well be a demarcation dispute between my hon. Friend the Member for the Isle of Wight (Mr. Woodnutt) and my hon. Friend the Member for Gosport and Fareham (Dr. Bennett), who addressed us a fortnight ago on the subject and whose son, apparently, was bold enough to try and buy these forts for what I thought a modest but not unreasonable price. But apparently he has had no answer on the point.
Not living closely to the area, I would not go contrary to what my hon. Friends have said regarding the delineation of Spitbank Fort to Portsmouth rather than Gosport, particularly as it seems to be connected by a ridge and is, therefore, closer and more contiguous, to Gosport. I wonder whether these proposals alter the planning situation. I have been very concerned at an attempt to build across an estuary in my part of the country a jetty, for the loading of iron ore, right across from the South Wales border to very near the edge of my constituency, in that of my hon. Friend the Member for Somerset, North (Mr. Dean). We operated together on this and were anxious about the protection of the local

authorities if any marine objects were built across the estuary.
It appears that my hon. Friend the Member for the Isle of Wight might have similar anxieties. I do not suggest that a jetty would be built, but there is the possibility of harnessing water or power supply. There was a second attempt in The Times a few days ago to raise public interest in a complete Severn barrage to harness the tidal waters. The waters are very different in the Solent, but this is relevant. Also relevant is the Morecambe Bay Barrage project, which is connected with the possible building of a nuclear power station and desalination plants at Heysham.
My hon. Friend and I both represent beautiful parts of the country and large centres of population. If there were a water harnessing or desalination project in this area, these forts might be used as centres for the start of the work and one would wish to be assured that the local authorities there are protected with consultation and right of appeal against any such authoritarian attempt to spoil the amenities.
The Assistant Postmaster-General's presence earlier this morning made me wonder whether there might be a connection between him and the forts. What would happen if a pirate radio station were set up on one of the forts? Would this be affected by the Order—

Mr. Deputy Speaker: The hon. Member is a long way from the Order. He must deal only with the matter in the Order.

Mr. Webster: I was inquiring, Mr. Deputy Speaker, whether there is anything in the Order to alter the existing local situation should anything like this arise. I am sure that the Parliamentary Secretary, will conscientiously look into this and be able to answer the points which have, I hope, been wisely and sensibly put.

11.13 a.m.

Mr. Graham Page: I have some questions about the Order and a few objections. One Article in the Order is without precedent. Article 2 says that the Order comes into operation
on the day following the day on which it has been approved by a resolution of each House of Parliament and for all other purposes on the appointed day immediately after the scheme set out in the Hampshire Police


(Amalgamation) Order, 1967 … has become fully operative.
I am querying the latter part of that.
In Article 3, we find that the appointed day is 1st April, 1967, as it is under the Hampshire Police (Amalgamation) Order. What then is meant by "has become fully operative"? Does it mean that this Order comes into operation at a particular time of day on 1st April? If so, how is one to know at what time the police scheme becomes fully operative, whether it is 9.30 a.m., 12 noon, or 4 o'clock in the afternoon? It is significant that the day is 1st April.
The Order is made under Section 140 of the Local Government Act, 1933. This immediately makes one wonder why the Government have gone back to that Act. That Section has quite a history. It disappeared from the Statute Book when the caretaker Government of 1945 set up the Local Government Boundary Commission under the Local Government (Boundary Commission) Act, 1945. When the succeeding Labour Government found that the Commission was not working to their party political advantage they dissolve it, by the Local Government Boundary Commission (Dissolution) Act of 1949. Section 140 of the 1933 Act returned amended to the State Book.
As the Section then stood, before an Order was made, the Minister was obliged to hold a public inquiry
unless, for special reasons, he thinks that the proposals ought not to be entertained.
But that was altered by the Local Government Act of 1958, under Schedule 8 of which the requirement as to public inquiry was no longer to apply
if the Minister is satisfied in any particular case that an inquiry is unnecessary.
There was no inquiry before this Order was made, which gives rise to two points. That fact and the reason for the Minister being satisfied should have appeared in the Preamble to the Order so as to make it clear that no previous public inquiry has been held in respect of the Order. Normally, when local government Orders come before us, we can be satisfied that there have been inquiries in the area concerned about their content.
The second point which arises from the absence of an inquiry is that the Minister ought not, in the circumstances

of this case, to have been satisfied that none was necessary. It is not a case of one local authority taking over an area from another, when good publicity could be expected by the interchanges between opposing or even agreeing local authorities. Notice would be served by one authority upon the other. But this is a peculiar situation, because there is no local authority there at all. The local authority in this case is the Ministry of Defence. In the absence of opposing local councils, how are the public to know that this is happening before the Order comes before us?
I am worried by the precedent of the procedure under which the Order has been brought forward. It is a procedure by Order without public inquiry which by-passes the Private Bill procedure. The Order is an alternative to a Private Bill. If it had been done by such a Bill, there could have been petitions by those members of the public affected. We have no process for Private Order procedure in the same way, although the other place does. I have no doubt that, when the Order is considered there, it will be referred to the appropriate Committee under their Standing Orders—

Mr. MacColl: It has been considered in another place.

Mr. Page: We ought to know whether it has been referred to the Standing Orders Committee. Another place referred similar Orders to its Standing Orders Committee so that petitions could be made against them. If this were a private Bill, members of the public specifically affected would be entitled to petition against it. The Order raises the question, not only whether we should have similar procedure in this House, but whether, in the absence of such procedure, the Minister should dispense with a public inquiry. He ought not to have been satisfied to dispense with a public inquiry.
It is a peculiar situation where the Minister of Defence up to this time has been the local authority. I do not know, and I do not think the House knows yet, what sort of justice was administered in these forts or what it is contemplated to do about justice there in future. Perhaps the Minister of Defence ought to have been here this morning to explain why he does not want the forts and why he is abandoning his powers as a local


authority over them. He has declared them surplus to requirements, but what is to happen to them now? Is the Ministry of Defence to sell them before the Order becomes effective, or afterwards?
This affects the Order from the point of view of rateable value being handed over. If they were sold to Butlin's or to a radio station, there would be a handsome credit against the cost of defence, which might please back benchers opposite. It might have a very substantial effect on rateable value being handed over to local authorities.
If they are to be used for any such valuable purpose, what is meant by Article 15? It deals with industrial development certificates, and says:
Any industrial development certificate under section 38 of the Town and Country Planning Act 1962 issued in respect of any land in the existing city or borough shall continue at and after the appointed time to have effect as if this order had not been made.
Industrial development certificates are normally issued, not for a particular piece of land, but for a particular area. Sometimes they are specifically allocated to a piece of land. Suppose that someone is issued with an industrial development certificate to develop an area in the City of Portsmouth. I do not know whether the words at the end of this article:
as if this Order had not been made
would enable that person to carry out his industrial development at one of these forts. The effect of the Article seems completely ambiguous.
Perhaps the forts might not be used for industrial purposes but as a top security prison. If they are retained by the Ministry of Defence, or handed over to the Home Office for a prison, will the Crown pay rates? The provisions in the Order relating to rates seem to have been taken out of previous Orders and are particularly inapplicable to these forts. Article 25 ties up with what I said about the question of the Crown paying rates. It says:
Any direction for the rating of owners or the allowance of a discount in respect of rates in force immediately before the appointed time in the city or the borough shall apply to the city or the borough as altered.
This seems to be quite inappropriate unless the Crown is becoming a landlord and letting these forts.
Article 24, which puts these forts into the appropriate valuation list, ends by saying:
and any Fort specified by article 4 of this order may be treated in a valuation list as a parish.
Are we to have four little parishes stuck in the middle of the Solent? Article 27 says:
Nothing in this order shall affect—
(b) any ecclesiastical parish or district;
We go back to Article 20 and find that these forts are given parish council powers. I am completely confused as to the effect of the Order in connection with a parish and the powers of a parish.
Article 26 seems very important. It is in common form. It is the Article which provides that:
any person who suffers loss of employment or loss or diminution of emoluments which is attributable to the provisions of this order …
shall be compensated. Is anyone going to lose employment through the fact that these forts become part of two local authorities? I cannot envisage anyone who would have any right under such an Article. Therefore, the Article seems most inappropriate.
We are not assisted in these problems by the reports from the two local authorities, the City of Portsmouth and the County of the Isle of Wight. The reports are peculiarly unhelpful in solving the problems or assisting us to judge whether this Order is appropriate or not. It is very significant that the two reports are couched in exactly the same words. This rather confirms what my hon. Friend said about the Order probably having been written by the Ministry and these reports having been written by the Ministry, also.
I shall quote a sentence or two from the report by the City of Portsmouth. It says:
The forts are controlled by the Ministry of Defence who have declared them surplus to their requirements. The Ministry have decided to dispose of both forts, which are unoccupied.
We are not told to whom or when the Ministry intends to dispose of the forts. The report goes on:
Hitherto the Minister of Defence and its predecessors have been the responsible public authority for the forts and, therefore, there has been no need for any local authority to have jurisdiction over them. It is not known for what purpose either of the forts may be acquired.


It is not known what sort of services the local authority will require to provide there. On whether the House should agree to the Ministry of Defence abandoning the forts, and the Minister abandoning his local authority duties in regard to them, and whether the House should agree to saddle the local authorities concerned with responsibility for the provision of services when we have no clue as to what the services may be, my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) said on 8th March:
I should like to place on the record that I want to know that in return for the rates which will be levied there suitable services will be provided, such as lighting and police and refuse disposal and other things. These will no doubt need further explanation in the course of the debate. But I should like, particularly, to ask the Minister who is in charge of this Order to consider this carefully again with a view to allowing a changed Order to be brought out allocating each fort to one of the four adjacent local authorities."—[OFFICIAL REPORT, 8th March, 1967; Vol. 742, c. 1479–80.]
I do not think that the House has sufficient information to approve this Order. I hope that the Parliamentary Secretary will be able to fill in the blanks. In particular, the inapplicability of many Articles in the Order and the inability fully to examine it, as it could have been examined by public inquiry, makes me wonder whether the procedure by order is correct. It seems to me a quite inappropriate procedure to use in these circumstances.

11.30 a.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): I must express my warm appreciation to the hon. Member for Crosby (Mr. Graham Page) for his questions about the appointed day. I spent the hour before coming into the Chamber in the privacy of my room rehearsing this matter. Those whose painful duty it is to advise me said, "Minister, this is above your intelligence. Would it not be better to leave it to us?". I said, "No. The hon. Member for Crosby may turn up in the Chamber and I may need to use it".
The appointed day, for normal purposes, is the first moment of that day. But it so happens that the police Order

comes into operation on the same day, and if it were held that the Solent Forts Order came into operation before the police Order then the outgoing police authority would have to cope with their problems and then a few moments later the incoming police authorities might have to deal with the matter. Therefore, the purpose of the phrase "appointed time" is to make it clear that the time of day in question is after the coming into operation of the new police Order and, therefore, it is the new police authorities which will have to exercise the police responsibilities.
The hon. Member raised a number of other points with which I should like to deal. He asked whether it was wise to use the procedure of making an Order under Section 140 and whether we should not have had an inquiry. He had the impression—and this may be partly due to the hon. Member for the Isle of Wight (Mr. Woodnutt)—that this was a case of a power-drunk and totalitarian Government forcing this property on the local authorities, giving them no opportunity to consider the merits of the matter and behaving in such an outrageous way that it might well lead to the secession of the Isle of Wight from the Commonwealth, followed by the County of Rutland. That is not what happened.
These forts have been owned by the Ministry of Defence and its predecessors in title for a century, in a no-man's land, in no local authority area, and as nobody was on them and the Ministry looked after them no problems arose. The difficulties were caused when suggestions were made that the Ministry of Defence would like to get rid of them. There was the likelihood, therefore, that they would get into the possession of a private person. It was the local authorities which raised with the Ministry of Defence the question of how best to get over the difficulty that some private exploiter might get hold of the property and develop it in such a way that it was under nobody's control.
That was the problem which, not this Government, but the previous Government had to consider. The advice which they were given was that if the property were put in a local authority's area it would get over the difficulties because the authority would then become the planning authority for the area.
Two of the forts were advertised in the London Gazette and the Portsmouth Evening News and the other two were advertised in the Isle of Wight County Press. What is being done is with the agreement and approval of the local authorities concerned. The allocation to the borough as opposed to the rural district authority was suggested by the county.

Mr. Woodnutt: I am sorry to contradict the hon. Gentleman. I am a member of the Isle of Wight County Council and I assure him that this suggestion was not made by the County Council. It was made by the Government. I do not quarrel with it—I agree with what is being done—but I should like to have the facts straight.

Mr. MacColl: I agree that there is no point in quarrelling about this matter. The hon. Gentleman believes that what is being done is right. I have no direct evidence on the matter, and I do not wish to argue with him. However, my advice is that these proposals were made by the county, which normally is responsible for allocation. I imagine that if for some reason it thought that it was wrong it could alter the decision later by agreement in the county review under the Local Government Act. But, as the hon. Gentleman says, this is probably the best arrangement.
I do not wish to get involved in some of the points raised by the hon. Member for Gosport and Fareham (Dr. Bennett) and the complications about whether if we followed the channels of navigation we might find ourselves in a different area of the county than we would if we went as the crow flies. This would get me into deep water.

Mr. Graham Page: This is closely connected with what I said about notices. The hon. Gentleman said that notices were given to each of the local authorities concerned. But were not they notices to the Press in the Isle of Wight saying that the Isle of Wight forts were to be taken over by the Isle of Wight and to the Press in Portsmouth saying that the forts in Portsmouth were to be taken over by Portsmouth? Portsmouth people might not know that there were four forts, all of which could be taken over, and vice versa.

Mr. MacColl: I imagine that it was done in that way. If we had not done it in that way, we should have been pilloried for extravagance in advertising in the wrong place. The residents of the Isle of Wight and Portsmouth know their coast and know what is their channel. Presumably they can make the appropriate comments. Certainly the local authorities knew the problem. They raised it originally.
Everybody has behaved sensibly in this case. There was a problem. People got together to decide how best to solve it, and they have reached this conclusion by agreement. The sensible thing to do is to accept these arrangements, which can only be for the general public good.
We have been rebuked for putting too much in the Order. It has been said that a lot of the Order is inappropriate. I have not yet got into trouble for putting too much in an order, but I have got into trouble for putting too little in an order. I could imagine the situation which would arise if we went through all the procedure of making this Order and then some indignant old gentleman saying, "What happens to me? I have a claim to compensation". We should then have to start making other orders to deal with the situation. It is important to tie up points like this in these common form Articles.
We have ben asked about the administration of justice and who would deal with the matter now. The Ministry of Defence did not have some sort of almost Gothic powers of life and death on this lonely fort. It was not the local authority in any legal sense. It owned it, and nobody else had any say in it. I presume that military law applied to the people on it, but it had no other responsibilities. The trouble is that if the property gets into normal civilian occupation these problems could arise, and it is important that we should deal with them.
The hon. Member for the Isle of Wight complained about Article 2. Article 4 is the Article which sets out the purposes of the Order and makes it clear. The hon. Gentleman told us about what Mr. Gladstone said in 1860, about the great debate which there was, about the threats of resignation by the Chancellor, and about the final triumph of the spending Department. He went on to


say that the forts had never been of any earthly use. What the hon. Gentleman said just showed that there is more to be said for the Treasury than those in spending Departments sometimes like to admit.
The hon. Gentleman said that he thought that we had been misled by the name of St. Helens. I assure the hon. Gentleman that St. Helens has a very different meaning to me, and, I think, to the hon. Member for Crosby, as a contiguous constituency to mine with an extremely good football team which frequently comes to Wembley. St. Helens has nothing to do with the South. I myself should not have been misled.
The hon. Member for Weston-super-Mare (Mr. Webster) asked what would happen in the way of control when the Order was passed, what real powers the planning authority would have and what general powers the local authorities would have. They will have exactly the same powers, duties and responsibilities in respect of this area, as much or as little as over any other parts of their area. If at any time one of the forts was to be developed as a casino or for some other type of entertainment, the local authority would no doubt be able to put a rateable value on it and collect rates. If the local authority cares to pass a resolution now under the Local Government Act to rate the property for the whole of the Borough of Ryde, following such other progressive authorities as Bournemouth and Eastbourne, they would then be able to rate it immediately and the whole machinery would come into operation.
I was asked what could be done about it if the Secretary of State for Defence ran a casino. I think I am right in saying that, if the Crown ran a casino on Crown property the Circular 100 procedure would apply. There would be consultations with the local planning authorities, although the planning law does not apply to Crown property.
The difficult point is what would happen if the Ministry was successful in selling these forts and there was then no means of applying ordinary planning controls.
Strenuous efforts have been made to see this rather mild and largely agreed Order as a great new revolution in local

government policy and procedure. We are a progressive and vigorous Government who are always pressing ahead with new ideas, but we would not claim this as being one of them. We regard this as a modest, humble and rather conventional operation which might well get the support of the House.

Question put and agreed to.

Resolved,
That the Isle of Wight and Portsmouth (Solent Forts) Order, 1967, dated 9th February, 1967, a copy of which was laid before this House on 16th February, be approved.

Orders of the Day — EDUCATION (AWARDS)

11.44 a.m.

Mr. W. R. van Straubenzee: I beg to move,
That an humble Address be presented to Her Majesty, praying that the University and Other Awards Amending Regulations 1967 (S.I., 1967. No. 209), dated 20th February 1967, a copy of which was laid before this House on 28th February, be annulled.
It is important to make it clear to those who watch our proceedings that it is necessary for an Opposition to pray against an Order in order to draw attention to the matter. Subject to the explanation which the Minister of State will be kind enough to give us, I want to make it quite clear that the object of the Prayer is to probe the matter rather than necessarily to speak against it in the strict sense of the word.
This is a very elaborate matter. I hope that the Minister of State will be kind enough to stop me at once if I go wrong on a matter of fact. These are elaborate Regulations through which to thread one's way and I would not want inadvertently to mislead anyone inside the House or outside it by giving a fact wrong. I will, first, explain briefly what I understand the effect of the Regulations to be.
These Regulations stem from the University and Other Awards Regulations, 1965, which are for this purpose the parent Regulations. These Regulations refer, in particular, to Schedule 2 of the parent Regulations and to the method by which the income of a parent is computed for purposes of a university or other award. In particular, reference is made to how that income is computed


when the parent's income includes interest from a building society. That I understand to be what we are considering.
As the Regulations stand, unamended by this Statutory Instrument, the provision in question being paragraph 2(a) of Part I of Schedule 2 to the 1965 Regulations, the parent's gross income is for this purpose assessed as his total income
from all sources, computed as for income tax purposes where United Kingdom Income Tax is payable.
Those last words were added by amending Regulations in 1966.
So a parent with a son or a daughter who is a candidate for an award has to prove his income to the authorities, computed as for Income Tax purposes. For example, if his income includes interest or dividends from which tax is deducted at source, what he does is exactly the same thing as with his Income Tax return. He states the gross income that he receives from such dividends. He may show what tax has been deducted, but the important point is that he shows his gross income.
When it comes to building society interest, on the other hand, he presumably at the moment shows his income as it actually is received.

The Minister of State, Department of Education and Science (Mr. Goronwy Roberts): indicated assent.

Mr. van Straubenne: I am much obliged to the Minister for indicating his assent, because this is clearly the point from which we start.
The new position, as a result of this Statutory Instrument, will be that a parent will show his income from investment, or from any other source, gross, in precisely the same way as he has up to now. However, in relation to interest he receives from his building society account he will no longer return just the actual amount he receives. He will, as the technical phrase goes, gross it up. He will gross up his building society interest at the building society's rate of tax, at the special rate of tax appropriate to a building society. This is the change, as I understand it, which is brought about by this Statutory Instrument.
I will explain briefly what this special rate of tax for a building society is. Every building society which has entered

into an agreement with the Revenue under the relevant Section of the 1952 Act—

Mr. Goronwy Roberts: I wonder whether I ought to intervene at this point to say that there will be no change under the amended Regulations in the way in which a parent will put down his building society item. That is to say, there is no change from the way he did it before, namely, to put down the net received by him. If I interrupted the hon. Gentleman unnecessarily, I am sure that he will forgive me.

Mr. van Straubenzee: I am most obliged to the hon. Gentleman. I shall be very grateful if he will explain this later. This is one of the reasons for having this Prayer. The Minister will understand that this has raised some doubts in the minds of parents and others. It will be helpful if we can have this carefully explained.
To justify the anxiety which is felt as a result of this Statutory Instrument, there is a special system for building societies by which they are subjected to what I will loosely call a "spot check" every year by the Revenue, and it is upon that "spot check" that their rate of tax is computed.
The intervention of the Minister is very helpful, but I have to remind the House that the actual terms of the Statutory Instrument require the income, in so far as it stems from building society interest, to have been deemed to have been received after deduction of Income Tax at the reduced rate to which I am referring. I should have thought that the effect of this is that there must be added to the return which the parent makes, the gross-up, at the building society rate, of the interest which he receives on his account.
Clearly, there is some change, or we would not have had this Statutory Instrument. The effect, as I see it—and again, we will be much helped by the Minister—is that the gross income of the parent, for the purposes of award, will be larger than it would otherwise have been.

Mr. Goronwy Roberts: indicated dissent.

Mr. van Straubenzee: The Minister is shaking his head in a contrary sense. He will understand just how difficult it is to


thread one's way through these highly complicated matters. As he has made the point quite clear, I can contract a number of the questions I have, because it is clear that the change is not so substantial as was previously thought.
The Minister will understand that at the moment there is no mention in the Regulations of building society interest, and that is why this matter has been brought in. Plainly, somebody, to use the jargon, will be grossing-up somewhere, otherwise there would be no point in having this Statutory Instrument.
The Minister said, by way of intervention, that the parent will not do so. As I understood him, the parent will still put down, in the return which he makes to the L.E.A., the actual sum which the parent receives from the building society. That will instantly set a large number of parents' minds at rest, because one of the problems that I would otherwise have raised with the hon. Gentleman is how the individual parent was expected to lay his hands upon the rate of tax to which the building society is subjected in the grossed-up income he receives from the building society. If ever I can again say a phrase like that, on a technical matter of this kind, I will congratulate myself.
We now have the position that the L.E.A. must take into account, for tax purposes, the gross income arising from the building society. It follows that in precisely the same way as the parent's net income from, for example, investments, is grossed-up, quite fairly and properly, for Income Tax purposes—which it has to be, because it has to be computed. In other words, he has to indicate the gross income and not net—so it must be that the local education authority, who are the people who take account of the tax which has been suffered, will, in effect, be awarding to the parent a higher income than he would otherwise have had. The result of that, as the Minister will realise, is that the award granted to the son or daughter is likely to be proportionately a little bit less.
There may not be a very great deal in this, but there are some snags. I wonder whether the hon. Gentleman, in the inquiries which he will have made from the Treasury, knows of any other circumstances in which building society

tax rates are taken into account. I wonder whether his inquiries with the Treasury can give any other precedent for this happening. I may be wrong, but I do not myself know of any other case where income in the hands of the taxpayer, albeit that he himself is not responsible for the process, is grossed-up at the building society's rate of tax. If there are other examples of precedents for this, I am sure that the Minister will be kind enough to give them.
There are a number of examples where holders of accounts in building societies have to gross them up for tax purposes. The most obvious example would be the Surtax payer. The Surtax payer who receives interest from a building society has to gross up that interest for the purpose of computing his Surtax liability. That is well understood. The significant difference is that the Surtax payer grosses it up at the standard rate of Income Tax, but here we are talking about a grossing-up process at the building society's rate of tax. As far as I know, there is no other example, and it would be helpful if the Minister's inquiries show this. Perhaps we might be allowed to know if there are precedents for this particular process.
The second point to which I should like to draw attention is that it contrasts fairly sharply with other broadly similar operations through which the ordinary citizen has to go. If, for example, somebody is applying to the Ministry of Social Security for a supplementary benefit, as it is now called, quite properly the income of the applicant is taken into account before any award is made. To that extent, the situation is broadly similar to the one we are now discussing.
As far as I know—I stand to be corrected—the Ministry of Social Security, in operating its scheme, takes into account the money actually received by the applicant from the building society. So far as I know, the Ministry does not require any kind of calculation of tax. The practical reason for that, is, of course, that if one is likely to come within the ambit of supplementary benefit payments, one is equally likely not to be affected by any kind of Income Tax. But the principle is the same, and I draw it to the Minister's attention as an example of another operation through


which the ordinary citizen goes, where, as far as I can see, no Government agency concerns itself with the tax which the income has suffered at the building society rate.
At the other end of the scale, let us suppose that there is someone who pays Surtax. At the moment, he grosses up at the standard rate of Income Tax. Under these Regulations his income will be grossed up at the building society rate of tax. Paradoxically, therefore, the Regulations will be of substantial benefit to the Surtax payer. This may, of course, be the Minister's intention, and I am not necessarily against that. I have never believed in sharply criticising the Surtax payer.
I think I heard one of my hon. Friends murmuring something about obtaining a grant. I ask my hon. Friend to consider the position of a person paying Surtax on unearned income if he has a comparatively large family. I shall not bore my hon. Friend with the details, but I have checked this, and I find that whereas, at the moment, for Surtax purposes he must gross up his interest from a building society at the standard rate of Income Tax, under the Regulations the local education authority will gross them up at the building society rate of tax. Proportionately, therefore, these Regulations will be of greater benefit to the Surtax payer than to other people. As I say, this may be what the Minister intends.
These are very narrow and highly technical points. I do not propose to stray from the strictness or the narrowness of the matters raised by the Regulations, because we cannot debate the principle behind them. These Regulations stem from the University and Other Awards Regulations, which are based on the principle of a parental contribution. It is this contribution which we are discussing, and it is one detailed aspect of that parental contribution which we are now questioning.
I think that it would be helpful, even in a short debate like this, if the Minister would make clear how much longer he expects a parental contribution will be required, and therefore how much longer this method of dealing with it from the point of view of building society interest will continue. The Minister will remember that as recently as 1963 his right

hon. Friend the Secretary of State set his hand to a Report entitled, "The Years of Crisis", issued by the Labour Party Study Group on Higher Education. The Report said quite definitely and clearly that parental contributions should be abolished.
In spite of the fact that we are dealing with the narrow point of building society interest, I think that it would be helpful if the Minister would say whether he expects these Regulations and their successors to continue, or whether he expects to come forward with other amending Regulations. I ask that because of the clear declaration to which I have just referred, that contributions would be abolished.
If it is the Government's intention to abolish them, these Regulations become of comparatively little interest, because they will not be in force for very much longer. If, on the other hand, it is not the Government's intention to carry out the statement in that Report, we must look at these Regulations more closely as they relate to building society interest.
I hope that it has been helpful for me to raise these matters, and we shall listen with interest to the Minister's detailed explanation of the issues involved.

12.5 p.m.

Mr. Kenneth Lewis: It is rather refreshing that for a change we are considering the obligation of parents from the point of view of education rather than considering a great deal of what has been said during the last week or two about students.
Last night I appeared on B.B.C. television to take part in a discussion with some of the students from the London School of Economics. They were sitting on cushions, and we were to sit on chairs. They said that it was wrong that we should be sitting on chairs while they were sitting on cushions. I said that we were used to sitting on the Floor of the House of Commons anyway, and that the only person who sat on a Chair in the House was Mr. Speaker or his Deputy, or the Chairman of Ways and Means or his Deputy, and the Clerk, and we did not, therefore, mind sitting on cushions. Last night was the first time that I have taken part in a public debate Japanese fashion.
These Regulations are very narrow indeed. Having listened to my hon. Friend


the Member for Wokingham (Mr. van Straubenzee), I am amazed at the authority with which he is able to disentangle them. I was unable to do so until I heard him. I am still not sure whether, when the Minister replies, he will say that these Regulations will be an advantage or a disadvantage to parents, which makes it rather difficult for me to put my argument.
The Regulations concern either an upward movement in a parent's obligations, or a downward movement, I am not sure which. One cannot help but be impressed by the fact that the obligations of parents under the 1965 Regulations, which were amended last year, and which we are amending again now, are very real, and that the amount of free grant is given at a very low level of income indeed. Many a typist earns a good deal more than £700. It is above this level that a person starts to make a contribution. A person with an income of £1,400 contributes £64, and thereafter contributes £1 for every £10 on the balance of income. If, therefore, the Regulations provide a benefit, it is only a small one in relation to the obligation imposed on parents.
I hope that all students will recognise that although the State assist with the cost of their education, some of us did not have the opportunities which they have and that parents have to pay a substantial part of the bill. I hope that students will recognise that these Regulations not only provide opportunities for the State to assist them, but impose obligations on them, and that the kind of nonsense about which we have been hearing during the last week or two must stop.

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Member is getting very wide of the Regulations which are concerned only with the computation of income.

Mr. Lewis: I understand that, Mr. Deputy Speaker, but the computation of income and these Regulations relate to the obligations of parents. The other day I asked the Secretary of State for Education and Science whether he was prepared to withdraw grants from students who were not attending courses, for instance when there was a strike as there has been at the L.S.E.

Mr. Deputy Speaker: Order. These are important matters, but the rules of order do not allow us to discuss them on these Regulations. The hon. Member must keep to the Regulations.

Mr. Lewis: The Minister replied to my Question in an odd way, by saying that the Regulations already permitted this to be done. But he said "No" at the beginning of his answer, which meant that he expected local authorities to take action but was not prepared to do so himself.
These Regulations make a change in respect of parents. Since the Minister is prepared to make a change in this respect he should be prepared to make a change by bringing in other Regulations to make it clear—

Mr. Deputy Speaker: I wonder whether the hon. Member heard what I said. I am afraid that he is out of order. He cannot discuss matters other than the Regulations and what is in them. He has gone beyond them. He must come back to the Regulations.

Mr. Lewis: I will come back to the Regulations, Mr. Deputy Speaker. They make a change in respect of parents. I should like to know from the Minister exactly what that change is. I hope that it is a change for the better. My hon. Friend the Member for Wokingham said that the Minister and his right hon. Friend had committed themselves eventually to do away with parental contributions to education. That being the case, the least the Minister can do is to make it easier for parents—but the Regulations do not do much in that respect. I would not say that they represent even a minimum step towards making it easier for parents with modest incomes—say, £24 a week and under. In those circumstances I hope that the Minister will tell us that he will bring in other Regulations, tied to these, which will go much further in assisting parents, and will make it clear that he hopes that student bodies will realise that they also have obligations.

Mr. Peter Archer: Is not the hon. Gentleman aware that students who have not followed their courses effectively are already weeded out? The universities attend to such matters.

Mr. Deputy Speaker: Order. We are getting wide of the matter in hand.

12.13 p.m.

Miss J. M. Quennell: I congratulate my hon. Friend upon threading his way through these rather incomprehensible Regulations with lucidity and skill. During the course of my hon. Friend's speech the Minister of State's expressions and inclinations of the head led me to hope that as a result of these Regulations parents will be no worse off than they were before. I do not want to curtail the time available to the Minister to reply, but I would have thought that the average parent, looking at the Regulations, would have been struck by the last part of the proviso in paragraph 2 and would have assumed immediately that it meant that he would be more severely hit by the change in the Regulations than apparently will be the case. I suggest that with Statutory Instruments of this nature the Explanatory Notes should be more comprehensive, so that people can understand what the contents of the Instruments mean.
The debate has served a very useful purpose. I hope that the Minister can put on record what the darned Regulations mean. Perhaps he will bear in mind the fact that Explanatory Notes which contain appalling grammatical abortions, as in this case, make the Instruments almost incomprehensible. An Explanatory Note which made some sense would be a great contribution towards a better understanding of the Regulations.

12.15 p.m.

The Minister of State, Department of Education and Science (Mr. Goronwy Roberts): These Amending Regulations are not intended to introduce any change in practice. They are intended to resolve doubts about the legal interpretation. They provide specific cover for a practice which has been recommended to local education authorities ever since the University and Other Awards Regulations, 1962, were made by the right hon. Member for Birmingham, Handsworth (Sir E. Boyle)—the then Minister of Education—following on the Education Act, 1962, when the new arrangements for awards came into effect.
When assessing the parental contribution towards the support of a student it

is intended that income derived from capital should be taken into account. Income derived from capital is subject to Income Tax, and these Regulations deal with certain complications which arise in computing parental income for the purpose of assessing parental contributions when the parent has shares or deposits in a building society. Broadly speaking, wherever it is possible to do so the Inland Revenue arranges for Income Tax on income from capital—investment income—to be collected by deduction before it reaches the person to whom the investment income belongs.
In the normal case of dividends from company shares the amount paid to the parent of a student is net of Income Tax. For every £ due to the parent of the student, gross, only 11s. 9d. is paid. The other 8s. 3d., representing the Income Tax on the dividend, is retained by the company, which is then responsible for accounting for it to the Inland Revenue. Nevertheless, the income of the parent would normally be regarded as the gross amount of dividend or interest and not the amount net of tax actually paid to him.
When assessing parental contributions the practice has always been to take into account the gross amount in dividends or interest due to the parents and not the smaller amount, net of tax, which is actually paid to him.
The position is somewhat different in the case of interest on investments in building societies. The Inland Revenue has special statutory arrangements with building societies whereby the societies do not deduct Income Tax from distributions to shareholders and depositors; instead, the societies account to the Inland Revenue for tax at a composite rate on the aggregate amount of the distribution. The rate to which the hon. Member referred is 6s. 3d. for 1966–67, and represents an average of the rates at which tax would be payable by the various investors.
The law expressly provides that no assessments are to be made on the investors, so that no further Income Tax is paid by them. It has always been the intention that parental contributions should be assessed by reference to the gross amount of interest from building societies—that is, the net amount grossed


up to take account of the special composite rate of Income Tax paid in respect of that interest by the building societies.
The position under the old University and other Awards Regulations, 1962, was, beyond doubt, that those Regulations were intended to provide for this grossing up of building society interest in computing parental incomes. The Department of Education and Science, and the Ministry of Education previously, has always advised authorities to gross up building society interest in this way.
Following a challenge of an authority's interpretation of the Awards Regulations on these lines, the matter was considered further with the conclusion that, as drafted, they left the matter open to doubt. To put it right, the Secretary of State decided to amend the definition of the gross income of the parents of an award holder receiving interest or dividends from a building society. The necessary Amendments have been made by the University and Other Awards (Amendment) Regulations, 1967, which are on the Table.
I stress that the Amending Regulations are intended solely to resolve doubts about the interpretation of the original Awards Regulations and not to alter the existing practice in the assessment of parental contributions. The present practice of grossing up building society interest accounts for just over 10s. a year of the value of the average award. By putting the present practice beyond doubt, there will be no change in the amount which the average parent will need to pay in support of a son or daughter who is an award holder.
The cost of ceasing to do this—not putting this beyond doubt—apart from the illogicality of such a procedure, would amount to over £150,000 a year, which would have to be met out of the total resources available for education. There is, thus, no new imposition on parents but an attempt in these Regulations to put beyond doubt what, the present practice, which has obtained under successive Governments and successive Ministers, has been since 1962.
The hon. Member for Wokingham (Mr. van Straubenzee) raised a number of important questions, and although some were not strictly within this discussion, they were, nevertheless, justifiable. He

mentioned precedents, on which I cannot give information at the moment, but I will consult my right hon. Friend at the Treasury about them. Second, he referred to the contrast with procedure for social benefit, and it would be useful to compare the two. There is justification for the variation. I thought that the hon. Gentleman understood that there were fundamental differences between the two spheres, but I take the point.
Third, he mentioned Surtax payers. The right comment on that would be that he is probably right about grossing up at 6s. 3d. in the £ in that case. If we followed Surtax precedent and grossed up at the standard rate of 8s. 3d., the parental contribution would be increased and the award's value reduced. Thus, we are, I think, being fair to parents, especially at levels of income which mean that they are unlikely to be receiving very high grants or paying only small contributions towards a student's support.
The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) spoke about student discipline and university government. He will understand that I cannot follow him into those deep waters, especially in view of the Chair's alertness. I was glad, however, to hear one or two of his points about parental contributions. It is right that the country should understand that many parents still make substantial sacrifices to support their sons and daughters in further and higher education. Without contravening the bounds of order, perhaps I may add that the vast majority of students understand this and that only a very small minority give the appearance of being impervious to the fact that a great effort has been made at home to sustain them and enable them to qualify for a meaningful and rewarding career.
I hope that my explanation will satisfy the House that there is no change in practice. Nobody gains or loses by this. On the question of what happens to the system of controlling awards in future, I do not wish to be drawn, but I would say that the foreword to the publication from which the hon. Gentleman quoted made it clear that it was not a Labour Party policy document. It has been made clear on more than one occasion that there are higher priorities in education than the abolition of parental contribution, however desirable that might be. It


would cost about £30 million a year, and I think both sides will balance this with the priorities on the social services generally. I hope that the hon. Gentleman and the House will agree that these Regulations should go forward.

Mr. van Straubenzee: We are obliged, as always, for the Minister of State's painstaking explanation. It is clear from his explanation that what has been happening may have been slightly improper legally and that the Regulations will put it right. What has happened is that some eager beaver, probably a lawyer, got on to this, and that is why the Undersecretary is here. I understand his embarrassment about my earlier question on the broad principle. We will not explore that now; we can come back to it.
In warm echo of what the hon. Gentleman said, I would agree that the Regulations will affect a large number of people, the greater proportion of whom are conscientiously carrying through their courses of study. It is important with desirable Regulations like this not to be knocked off our perches by any recent or other events.
I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Orders of the Day — ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bishop.]

12.29 a.m.

Mr. Tam Dalyell: In the small hours of Tuesday morning, my hon. Friend the Member for Wednesbury (Mr. Stonehouse) made an important speech, which started at about 3.40, on the future of the British aircraft industry. That speech ought to be studied and read by all of us who are interested in these matters. I thank my hon. Friend, in view of the many problems which he has on his hands, for being here for this debate. It would also not be out of order, perhaps, to wish him well in all his present negotiations on the matter of the "airbus". We hope that these come to a satisfactory conclusion.
I say that partly because, although we are dealing with the technical details of variable geometry aircraft, this affects the whole future of the British aircraft industry, and I should like to ask him if he is sure that the proposition which is often stated that the British aircraft industry depends on sophisticated military orders is the whole truth.
Yesterday morning, thanks to the hon. Member for Gosport and Fareham (Dr. Bennett), a number of my colleagues and I had the good fortune to visit the Comprehensive Designers' International at Southall. We saw a set-up there whereby a computer in Marietta, Georgia, can operate for the benefit of designers in Southall between one and 7.30 in the morning, American time. In that kind of situation, technological progress may overtake many of the discussions which we have been having about the future of the British aircraft industry, and these are matters which should be taken into account.
Before I come to particulars, there is one other question which is rather confusing, and that is the matter of the German visit in relation to the AFVG aircraft. I would refer my hon. Friend to a Question which I put to the Secretary of State for Defence on 1st March, when I said:
Can the Minister say anything about the visit of General Steinhoff and his German colleagues to negotiate about this?
Back came the reply:
I am not aware of any such visit."—[OFFICIAL REPORT, 1st March, 1967; Vol. 742, c. 479.]
Last Monday, The Times carried the following:
General Johannes Steinhoff, chief of the West German Air Force, will be in Britain for three days from tomorrow. Anglo-American competition for re-equipping the German Air Force makes his visit of special interest. General Steinhoff will visit aviation concerns, including Rolls-Royce and Bristol-Siddeley, and will be shown the variable geometry (swing-wing) aircraft. It is hoped here that the British Jaguar, which is a tactical aircraft and advanced trainer for the early 1970s, could replace the German G 91. The swine-wing aircraft is a possible successor for the F104 G Starfighter.
What worries many hon. Members is the question of the political control of the Ministry of Defence. I am willing to believe that there is some explanation for this, but it seems to some of us that


the sale to the West Germans of extremely sophisticated nuclear strike aircraft, which is what they are, like several other current planes, is a matter of major consequence. In this debate, I am not passing judgment on whether such negotiations are right. I say merely that their importance can hardly be disputed.
The purpose of this Adjournment debate is to discuss some of the technical aspects of the Anglo-French variable geometry aircraft. I do not propose, therefore, to repeat the concern about the wide issues of foreign affairs, defence, and strategic commitment in relation to the AFVG which I displayed during the Air Estimates debate on 14th March. Rather, my task this morning is to enlarge on some detailed points made in the debate, to which my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) had neither the time nor, I suspect, the Departmental authority to reply. That is no reflection upon him.
However, there is one general point which I wish to make, and it is that many hon. Members are conditioned by their own past experiences. I am conditioned by my own, having sat every Tuesday and Thursday for three years on the Public Accounts Committee. Any man who has had that experience is by nature sensitive to the dramatic escalation in aircraft and weapons costs. If I cannot bring myself to believe the Departmental estimates, it is partly because of memories of Seaslug, Thunderbird, Blue Steel, Blue Streak, Skybolt and the TSR2. Nor can more recent experience of Concord provide much comfort, since costs have rocketed by a factor of three from an original estimate of between £150 million and £170 million to over £450 million and probably more.
The hon. Member for Mid-Bedfordshire (Mr. Hastings) can deploy the figures for the TSR2. In December, 1959, the cost of TSR2 was estimated to be between £80 million and £90 million. By March, 1962, it had risen to £137 million. By January, 1963, the estimates had been revised to between £175 million and £200 million. With the extension of the time scale for introduction into service, by January, 1964, the costs had risen to between £240 million and £260 million. What is now known about forward cost-

ing which was not known during the early sixties at the time of TSR2?
However, there are reasons other than past experience for being sceptical about an estimate of £200 million for research and development on the AFVG. We are dealing with experiment and unknown factors where there may be a simple expense curve but where, equally, the expense curve can easily show a sharp incline due to the introduction of unexpected problems. For example, I understand that probably the AFVG will depend to a marked degree on the success of current titanium research. Is my hon. Friend aware of the difficulty and, therefore, the expense in which Lockheed found itself involved in problems of titanium extrusion for its A11 high altitude aircraft? Will Britain profit by Lockheed's experience? If so, what do we pay for that experience? If not, what is the estimate of the costs of titanium research and the setting up of the necessary giant presses? In this field of activity, if it is to be good, research needs to go deep. One is continually finding new problems.
Again, the Secretary of State has claimed that we are "streets ahead" of the Americans in variable geometry techniques. That is a statement that has not yet been substantiated, and I should be grateful for any evidence that that is so. I should like to be clear that the £200 million R & D costs include the extensive and expensive wind tunnel facilities used for demonstrating the feasibility of aircraft substantially lighter than the F111 using variable geometry techniques. Can my hon. Friend confirm or deny that?
Then there is the whole question of the time-cost relationship. Perhaps the most impressive aspect of all American achievement in this field of activity is the remarkably short time that they have taken from concept to drawing board, to roll-off, to service use. If I understand it correctly, in the case of the F111 it is probably about 2½ years, as it is for the C5a, the great military transport aircraft. But, even if all goes to plan, the AFVG will not be ready until seven years from now. Perhaps five years, at any rate, is a comparable figure with the Americans' 2½ years.
Yesterday, I asked my hon. Friend what estimate he has made of the number of months between the start of drawing board work on the AFVG aircraft and the coming of the first AFVG into Royal Air Force service. His answer was:
Until we have completed the project definition study it is not possible to estimate precisely how long development will take. But the present intention is that the aircraft should enter service with the R.A.F. in the mid-seventies."—[OFFICIAL REPORT, 21st March, 1967; Vol. 743, c. 226.]
That answer, by implication, casts the gravest doubt on any cost estimate figure. How can an R & D cost estimate be given if the project definition study has not been completed? I repeat the question about how many prototypes are to be set up. Are we saying that we need less than the 15 models which the Americans needed to the test the F111?
My hon. Friend assures me that extensive wind tunnel research is being done on weight problems. Are we quite certain that these weight problems have been overcome, and what importance does he attach to comparable American experience?
May I give another example of one of the many problems? I understand that flying at from 200 ft. to 600 ft. at supersonic speeds—and even at high subsonic speeds—the bomb bays will heat up to the order of 250°F. That is the technical opinion I have. At this temperature, conventional explosives become unstable and melt, and if the plane jerks they may well explode. Are the Government working on research into an insulated bomb casing and, if so, at what cost? I give this as an example of one of the very many problems involved. Has it or has it not been taken into account?
Outside the Government service nobody to whom I have talked on these matters can really bring themselves to believe that on a production of 300 we can get a unit cost of £1·5 million. What is being done to ensure a smooth production run?
There is also the question of modifications if we are to export this aircraft. I understood in November that there was a datum design. We know from previous experience that modifications are extremely sophisticated and awkward, and therefore expensive. What is the result of negotiations with the Dutch and the Germans on this matter?
What are the exact terms of the break clause, and what do the French Press mean when they talk about the financial barrier being "broken this November"? Any information my hon. Friend can give on the exact terms of the contract would be extremely welcome.
I turn to the question of quantity, in the light of yesterday's news that we are to go ahead with the purchase of 40 extra F111s—a subject on which I shall not now comment; nor do I make any innuendo in saying that. Why, in terms of quantity, should we require both the AFVG and the F111 if one assumes that by the mid-'seventies we shall not be committed to a world rôle?
I know that my hon. Friend the Member for Leeds, South is extremely concerned about the welfare of the Royal Air Force, and I am concerned about the pilots of the aircraft—I really am. Flying this kind of aircraft involves a totally different order of risk from that involved in flying a Canberra or a V-bomber. The tragic crashes at Edwards Air Force base bear testimony to the hazards to test pilots, let alone trainees.
In these circumstances, neither my hon. Friend nor I would wish to commit the men of the Royal Air Force to such aircraft without all the latest equipment. That is common ground between us. This may mean neither more nor less than research on and production of malfunction equipment and recording system equipment for light aircraft. Has any calculation been made of the costs involved? My information is that Lockheed and other firms have found this extremely expensive. I should also like to know about the cost of training pilots when using terrain-following equipment—again an extremely difficult matter. And could we be told anything about initial payments as between Britain and France?
I should like to know what arrangements have been made for the future costing of our commitments. Yesterday, in a Parliamentary Question, I asked the Prime Minister:
… if he will instruct the Secretary of State for Defence and the Minister of Technology to set out in the OFFICIAL REPORT a table showing the total liabilities which it is at present estimated will be incurred in 1968, 1969 1970, 1971, 1972, 1973, 1974, 1975, 1976, and 1977, respectively, on the development and purchase of military aircraft at home and abroad."


—[OFFICIAL REPORT, 21st March, 1967; Vol. 743, c. 240.]
Whatever may be one's views on the matter, and they are very wide across the House, the Government should set out absolutely clearly what the present estimates are in relation to this highly expensive equipment.
Time is running out, and I end by quoting the Prime Minister, quoting the Financial Times with approval, when he said that we should leave to others
… the fatuous search for national prestige through the belated and the technologically inferior production of weapons that belong in the arsenals of powers richer than ourselves.
If I seem to be persistent and obstinate on this issue, it is because I believe that in this matter, although technologically the Government have done many extremely good things—I am a great supporter of the Ministry of Technology—we are set on a course which is catastrophic for this party, catastrophic for this Government and for ensuing Governments of whatever party, and catastrophic for Great Britain.

12.45 p.m.

Mr. Stephen Hastings: I have no wish to cut into the time available to the Minister for his reply, but only desire to put two questions to him. I congratulate the hon. Member for West Lothian (Mr. Dalyell) on bringing up this important subject this morning, on his grasp of it, and on the detailed way in which he has put his questions.
These are my questions. First, on the question of General Steinhoff's visit, which is a most important development, is he here to negotiate for the re-equipment of the German Air Force, or is it a question of participation in this project? Details would be very welcome to this side. Secondly, the hon. Gentleman said that this aircraft appears to be scheduled to come into service in the mid-'seventies. Will this be in time for it to compete if compete it has to, with the American AFX project? Is it not possible that the AFVG could be produced earlier if we were prepared to push on with that project a little faster than now appears to be envisaged?

12.47 p.m.

The Minister of State, Ministry of Technology (Mr. John Stonehouse): I

am grateful, as I am sure the House is, to my hon. Friend the Member for West Lothian (Mr. Dalyell) for initiating this debate. It is an extremely important subject, not only because of the great amount of money at stake but because our defence requirements need us to have sophisticated aircraft of this type. It is better, if we can, to provide this from our resources rather than be dependent on supplies from the United States.
I am glad that my hon. Friend did not develop his thoughts on the operational requirement aspect, as this is a matter for my right hon. Friend the Secretary of State for Defence and my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force. We must accept that when the Royal Air Force has this requirement, which must be met, we must do our best within the Ministry of Technology to meet that requirement from our own resources.
We have acknowledged that we cannot develop advanced aircraft of this character merely to meet the requirements of the Royal Air Force. We have, therefore, entered into discussions with the French with a view to fulfilling their needs as well as ours from a joint development programme. We decided that we could not afford to go on with the development of an aircraft like the TSR2, so, in May, 1965, we signed the first Understanding with France. Since then, we have been engaged in extensive operational, technical and financial discussions with our French partners in furtherance of the project.
It is not, of course, easy to engage in these advanced technological developments as between two powerful nations. Each has its own ideas, and these must be reconciled. In this particular case, the French, as is well known, want the aircraft as an interceptor, while we want it for strike. We also have to decide exactly how the work shall be shared out as between the chosen aircraft contractors, that is to say, the British Aircraft Corporation and Avions Marcel Dassault, and the engine manufacturers, Bristol Siddeley and S.N.E.C.M.A.
On all these complicated matters we have made considerable progress. British and French officials, as well as the contractors, are working well together on the project. There are certainly important technical difficulties still to overcome.


and the precise way in which we shall meet the different operational requirements of the two countries will be examined further at a meeting between us and the French at Ministerial level next month.
We then hope to embark on the precise project definition study by 1st May. This should last for six months and at the end of this time we ought to have a precise specification of the aircraft, including engines and equipment, which is to be built and a full development cost plan against which technical and financial progress can be monitored. We ought then to be able to proceed to the building of prototypes at the beginning of 1968, so that the aircraft can enter into service with the R.A.F. in the mid-70s.
My hon. Friend asked a number of questions about the estimated cost of developing and producing this aircraft. We and the manufacturers have, of course, already done a number of detailed studies on this aspect of the problem. Indeed, it is fair to say that the cost estimating which has already gone into this project has been more detailed than that devoted to any other British or Anglo/French at this stage of its life.
My hon. Friend also raised a number of technical questions and asked for a breakdown into constituent parts. This we have done for the AFVG in great detail, we have a wide range of experience in this field, including developing and manufacturing supersonic military combat aircraft—notably the Lightning and the TSR2. In many areas of work such as the numbers of designers and technicians required and in manufacturing effort such as the man hours per aircraft weight and the rates of flying at which this development can be conducted, good relationships have been developed. We believe that much more reliance can be placed on the efforts required than previously in the construction of similar aircraft.
On the production side, similar progress has been made. Similarly, on the engine costs, we have related the cost of the AFVG to high performance aircraft engine cost such as the Spey and Olympus. The cost takes account of different equipment such as that for reconnaissance and strike versions. If these techniques had been available at the time when plans for the TSR2 and Con-

cord were made they might have resulted in estimates which were very much closer and more in line with an appreciation of the costs.
We have improved our control of this sort of development, and we have a project director. He has a branch in which is centralised the technical and financial responsibility for estimating and control of the project. Moreover, the AFVG has been going through a prolonged feasibility study phase because of the need to reach detailed agreement with our French partners and different United Kingdom and French requirements. This feasibility study has been done in much more technical detail than would have been the case with a normal United Kingdom project.
We know that it is not until a project is more closely defined that we can get a true estimation of other development or production costs, but we have the experience of the degradations in drag and weight growth which have usually occurred during earlier definition studies. When we have completed the definition study stage during this year we shall be able to give more precise figures as to the actual costs. We shall have up-to-date costs as to estimates and take into account the final specification of the aircraft including its engines and equipment.
If the sort of aircraft we have defined cannot be bought within the target we have in mind, which is a realistic target meeting our requirements within a certain cost figure, we shall certainly have to review our decision. My hon. Friend and the House would generally agree that this is a sensible course to adopt but we have not yet reached that stage and we are doing a great deal of work to ensure that when we make a decision on the next stage we shall have all the available information to make a sensible decision.
My hon. Friend asked about the export potential, especially in relation to the Germans. We are hoping slightly to "bend" the design of aircraft to meet the requirements of customers. We are taking all possible steps to inform prospective customers of our plans and what we can offer them. For example, an important presentation was made to the Dutch last month and the Germans were very interested indeed in our proposals.
I am glad that General Steinhoff, the Chief of Air Staff of the German Air


Force, is visiting B.A.C., Warton, and Rolls-Royce this week in connection not only with this project, but also with the Jaguar. The House may be assured that we shall continue with the French to press forward with the idea of aligning Germany with the project. The object of the visit is fact-finding. We are anxious to provide information to General Steinhoff and any proposals he can make will be considered. The time scale is very important if we are to have a chance of capitalising on the export potential. I hope very much that we shall be able to complete the aircraft on the time scale laid down. This gives a very good chance indeed to compete against other aircraft which may be produced in the United States.
The next question that my hon. Friend asked was about the break clause—and allied with this the development by Marcel Dassault of the Mirage 3G. There is, of course, a break clause in all our agreements with the French on these aeronautical projects except the Concord. And I think that the House would have it so. In the case of the VG project, either side can withdraw without notice up to 1st June, 1967. Thereafter, withdrawal becomes effective after 14 months of the date of having given first notice of the intention to withdraw.
The provisions are part of the understanding which was reached by my right hon. Friends with the French in May, 1965. Because, however, the VG project has been slower to get under way than we first anticipated we and the French are now discussing putting back the date

of 1st June, 1967, up to which time, as I have explained, either side can withdraw without notice.
The fact that Marcel Dassault are building a prototype VG aircraft—the Mirage 3G—seems to me to have nothing to do with these withdrawal provisions. The 3G is a single-engined VG aircraft—and because it is single engined it is not favoured by either the French or the British staff. It does, however, provide valuable experience and M. Messmer has already stated that this will be put freely at the disposal of both sides.
My hon. Friend referred to various projects of development of a sophisticated aircraft of the character of the AFVG. I can assure him that there is immense experience both within B.A.C. itself and within the Ministry for the development of a swing-wing plane of this character. I am sure that it is well within the capability of the British aircraft industry and our engine firms to produce an aircraft to the specification that is required by the Royal Air Force.

Mr. Dalyell: Do I understand that it is the hope of the Government that no firm decision will be arrived at until such time as the project definition study has been completed even though that may be later in the year?

Mr. Stonehouse: We are proceeding to the projects definition study provided that we have the assurance I have described.

The debate having been concluded, Mr. DEPUTY SPEAKER suspended the sitting till half-past Two o'clock, pursuant to Order.

Sitting resumed at 2.30 p.m.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Dairy Farmers

Mr. Monro: asked the Minister of Agriculture, Fisheries and Food what action he is taking to improve the financial return of dairy farmers.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): The award for milk at the recent Farm Price Review is equivalent to 1½d. a gallon on the guaranteed price and will increase the financial return of dairy farmers by nearly £14 million. Dairy farmers will also benefit from the higher rates of calf subsidy.

Mr. Monro: That is all very well, but does the Minister realise that, with the loss of the fertiliser subsidy and the ploughing grant, dairy farmers will be as badly off as ever?

Mr. Peart: I am rather surprised that the hon. Gentleman should be so carping as to say, "That is all very well". This award has been welcomed by the producers. The hon. Gentleman should be a little more objective.

Hill Farmers

Mr. Monro: asked the Minister of Agriculture, Fisheries and Food what action he is taking to improve the financial return of hill farmers.

Mr. Jopling: asked the Minister of Agriculture, Fisheries and Food, in view of impending bankruptcies among hill farmers, whether he will now take steps to alleviate their position; and if he will make a statement.

Mr. Peart: We have increased the rates of hill cow and hill sheep subsidy. The hill sheep subsidy is to be extended to flocks in the wider area eligible for hill cow subsidy and the date of payment is to be advanced. The calf subsidy and guaranteed prices of fat sheep and fat cattle are also increased. These measures will be of considerable benefit to hill farmers.

Mr. Monro: Is the Minister aware that I do not think that he has given any thing like enough to the hill sheep industry after such a disastrous year as the past twelve months? Cannot he do more for the hill ewe subsidy?

Mr. Peart: A careful study of what I have decided in the Review will show that this award, which has been welcomed by those in hill areas, will dispel the gloom which the hon. Gentleman seeks to spread.

Mr. Jopling: Is the Minister aware that hill fanning is a much more long-term business than, say, crop production, and that confidence is essential? Is he further aware that confidence in these areas has been severely strained and that what is needed is a steady expansion programme rather than what he has been doing in the last two and a half years?

Mr. Peart: I am aware that the problems of hill areas involve a long-term approach. That is why we have introduced a Bill partly to deal with the problems of hill and upland areas. This, above all, is why the award has been welcomed by those who know these areas well.

Mr. Rankin: In view of the millions of pounds that we donated to the farming industry last year and in view of the continued dissatisfaction of the Tory Party, to help farmers further would my right hon. Friend consider going round the Tory Party with a hat?

Mr. Speaker: Order. The original Question is about hill farmers.

Agricultural Profits (East Midlands)

Mr. Godber: asked the Minister of Agriculture, Fisheries and Food why agricultural profits in the area of the East Midlands fell by 12½ per cent. last year.

Mr. Peart: The dull wet summer and autumn of 1965 generally depressed crop output and increased the cost of the harvest. This reduced farm incomes in the East Midlands in 1965–66 below the record level reached in 1964, when farm incomes in this area had increased very substantially. Such fluctuations in net income, due to weather and other factors, are natural hazards of farming.

Mr. Godber: We all recognise the natural hazards of fanning, but there are also some unnatural ones. Does the Minister consider that this year's Price Review will restore this cut, having in mind that the East Midlands area is largely arable and that the Price Review, whatever it has done on the livestock side, has done very little for the arable side?

Mr. Peart: The results of the farm income survey in the East Midlands, together with other similar surveys, were fully taken into account in the 1967 Review. Although it is difficult to assess net income in the East Midlands in particular, I believe that they will benefit from the Review.

Eggs

Mr. Peter Mills: asked the Minister of Agriculture, Fisheries and Food what further action he will take for the coordination of imports with domestic egg supplies.

Mr. Peart: I have nothing to add to the Answer I gave the right hon. Members for Grantham (Mr. Godber) and Thirsk and Malton (Mr. Turton) and my hon. Friend the Member for Meriden (Mr. Rowland) on 15th February.

Mr. Mills: Surely the Minister does not intend to allow this situation to drift on and on. It is his duty to give a lead, which he is not doing, on the control of imports. Does he realise that the industry is looking for this lead? Indeed, the Egg Marketing Board is looking to him to give this lead to the industry.

Mr. Peart: It is contrary to international obligations to ban imports of eggs, or to impose restrictions on them. I do not see that any case has yet been made out for altering these arrangements. I have told the National Farmers' Union that if it can convince me that imports are the cause of the present low price, I am willing to review the situation. I think that this is reasonable.

Sir H. Harrison: Will the Minister have another talk with the President of the Board of Trade, who has always taken a very rigid attitude about allowing what is relatively a small amount of imports of eggs to come in from foreign countries, because these imports affect the price of eggs in this country?

Mr. Peart: This has been the traditional pattern of our trading relations. We have international obligations. If there is a case of dumping, the case must be made, and my right hon. Friend the President of the Board of Trade will consider it objectively.

Mr. Pardoe: asked the Minister of Agriculture, Fisheries and Food what action he has taken to implement the findings and recommendations of the Committee of Investigation for Great Britain into complaints by Western Egg Pasteurising Company Limited and a consortium of agricultural co-operatives.

Mr. Peart: As I said in reply to a Question from my hon. Friend the Member for Norfolk, North (Mr. Hazell) on 7th March, my right hon. Friends and I have invited comments on the British Egg Marketing Board's draft proposals for new egg processing arrangements. [Vol. 742, c. 256.]

Mr. Pardoe: While thanking the Minister for that reply, may I remind him that 90 per cent. of the egg market will be carved up by the present monopolist-holders? Does he believe that this is in keeping with the recommendation of the Committee of Investigation, which recommended that the whole system should be based on open tender?

Mr. Peart: I think that the hon. Member, who thanked me for my reply, should await the discussions and examination of the comments on the proposals. This is sensible.

Mr. Charles Morrison: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied by the level of profitability of egg production; and if he will make a statement.

Mr. Peart: Yes, Sir. The Government consider that there continues to be a danger that production of eggs will increase faster than demand and accordingly decided to reduce the guaranteed price after this year's Annual Review.

Mr. Morrison: Is the right hon. Gentleman aware that present controls are causing a steady decline in confidence in the industry, and that this is bound to be increased by the cut in the guarantee price? Would he not agree that there is very considerable danger that before long


there might be a shortage of home supply?

Mr. Peart: I cannot accept that there is a decline of confidence in the industry. There was a danger that output would outstrip demand. I cannot allow this. No Minister, of whatever political complexion, could afford to do so.

Mr. Henry Clark: Will the Minister confirm that large grants are being paid by the Government to multi-million factory units in Scotland?

Mr. Peart: I think that it is true that aid has been given in certain regions for certain concerns. I do not know whether the hon. Member is against this or for it.

Mr. Boyd-Carpenter: asked the Minister of Agriculture, Fisheries and Food what is the average age of eggs bearing the Lion mark when purchased by consumers.

The Joint Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): No precise information is available on this point.

Mr. Gwilym Roberts: asked the Minister of Agriculture, Fisheries and Food if he has studied the letter on egg production from the Chairman of the Leighton Buzzard National Farmers' Union, sent to him by the hon. Member for South Bedfordshire; and what steps he is taking to stimulate home egg production.

Mr. Peart: Yes, Sir, and I have written to the hon. Member. As last week's Annual Review White Paper makes clear, the Government consider that the underlying trend for production of eggs to rise faster than demand continues to be the danger.

Mr. Roberts: Although it is very difficult to act because of the dangers of production exceeding demand, would my right hon. Friend consider taking action to increase consumer demand for eggs and thus maintain the viability of this side of agriculture?

Mr. Peart: The question of publicity to encourage people to eat more eggs is something with which the Egg Board is concerned. We must leave it to the Board.

Bacon

Mr. Peter Mills: asked the Minister of Agriculture, Fisheries and Food what was the fall in home production of bacon in the three months October, November and December, 1966, compared with 1965; and what he is doing to arrest this trend.

Mr. Peart: Home production of bacon was 10,800 tons lower in October/December, 1966, than in the same period of 1965. We have taken action at the Annual Review to stimulate pig production; and the temporary assistance to curers introduced last December has arrested the decline in bacon production. Discussions are proceeding on long-term arrangements to stabilise returns to the bacon industry, and I will make a further statement as soon as possible.

Mr. Mills: Surely the Minister must come clean. What are his intentions in the future for the bacon industry? What advice is he giving to the industry? Does he realise that the industry itself wants to put its own house in order as regards rationalisation and quality of bacon?

Mr. Peart: When people talk about putting their own houses in order, it is for them to do it. I have helped. I am now having discussions with the bacon industry. I cannot make a decision until I have had all necessary consultations. I decided at the Annual Review—the supply of pigs is relevant to this—to give a stimulus. Producers will get 1s. 11d. a score. This should have the hon. Gentleman's approval.

Cattle and Sheep

Mr. Godber: asked the Minister of Agriculture, Fisheries and Food what further action he will take for the coordination of imports with domestic beef supplies.

Mr. Loveys: asked the Minister of Agriculture, Fisheries and Food if he will review the Government's import policy to prevent a repetition of over-supply of cattle and sheep which occurred in the markets last summer.

Mr. Wolrige-Gordon: asked the Minister of Agriculture, Fisheries and Food what further action he intends to take to co-ordinate imports with domestic supplies of beef.

Mr. Peart: Prospective supplies from all sources are regularly reviewed with our major suppliers in the Meat Study Group, and on present prospects imports in carcase form should be reasonably well matched to demand. As for fat cattle imports from the Irish Republic, I have had discussions with the Minister there and will be meeting him again. We are both anxious to avoid a repetition of last year's difficulties.

Mr. Godber: Will not the Minister accept that something more needs to be done in this regard? In his Price Review White Paper, he admits the need to restore confidence. He has done something in regard to prices. He must do something more in regard to co-ordination of imports, because this was one of the major factors last year, as I am sure he realises. Something more must be done to co-ordinate.

Mr. Peart: This is precisely what I have said. I am glad that it is accepted that I have done something as regards prices. The Opposition are coming on. The marketing side and phasing are important. It is not an easy problem. I am in touch with my counterpart in the Irish Government and have had discussions with him on this. The Irish fat position on our market has been an important factor.

Mr. Loveys: Is not the Minister aware that his Answer indicates no real attempt to prevent a repetition of the over-supply of cattle and sheep, which depressed the market so seriously last summer? Whether or not we enter the E.E.C., does not he agree that a similar system to that operated in the Community is the only way of ensuring well balanced supplies in the future?

Mr. Peart: We are not yet in the E.E.C. I recognise that the question of the levy system operated by the E.E.C. was a matter which affected our position, because of the closure of Community markets to Irish supplies and also to supplies from this country. This is something which we are discussing in the Kennedy Round, as the hon. Gentleman must know. I am anxious to have an agreement whereby we have this greater liberalisation; this could affect our position.

Mr. Godber: On the right hon. Gentleman's last point, are we to assume that he

expects a solution to emerge from the Kennedy Round? If not, will he do something about definitely protecting the home producer from the effects of the Common Market levy?

Mr. Peart: As I have always told the right hon. Gentleman, he should not indulge too much in hypothetics, and he should recognise that we are conducting serious negotiations at Geneva and inevitably meat supplies and trading in the meat industry are involved. I cannot tell hon Members the outcome. All that I have said is that I hope that we shall have a successful conclusion.

Foot-and-Mouth Disease

Mr. Stodart: asked the Minister of Agriculture, Fisheries and Food of what persons he made inquiries, in order to elucidate the rights and wrongs of the allegations made about the suffering caused to animals during the outbreak of foot-and-mouth disease in Northumberland, other than of those who had acted as his agents in one capacity or another.

Mr. Peart: I undertook to inquire into certain allegations reported by the hon. Member for Berwick-upon-Tweed (Viscount Lambton). In doing this I accepted that his statements correctly reflected the allegations made to him. I am willing to consider comments from any of those concerned if they wish to amplify their statements in the light of my report; and I am now examining further observations from one fanner which the hon. Member for Berwick-upon-Tweed sent to me last week.

Mr. Stodart: Does not the right hon. Gentleman think that this is a step in the right direction? Was it not his intention that the inquiry should get all the facts and allay the criticism and anxiety? Does he not agree that the absence of statements from shepherds and so on who are reported in the newspapers to have made allegations deprives the report of much valuable information?

Mr. Peart: I am anxious to do what is right here. I am glad that the hon. Member accepted what I said in my reply. I took the statements at their face value and have given my detailed comments on them. The hon. Gentleman would not expect me to interview constituents and


other witnesses behind an hon. Member's back. I refuse to do that.

Mr. Wolrige-Gordon: asked the Minister of Agriculture, Fisheries and Food what plans he has to use troops trained to meet this emergency to deal with outbreaks of foot and mouth disease.

Mr. Peart: This is one of a number of suggestions made to me by the National Farmers' Unions which are being examined.

Mr. Wolrige-Gordon: Is the Minister aware that considerable advantages are to be gained from considering the suggestion, not least because it might have helped him to avoid some of his recent difficulties in this connection?

Mr. Peart: This is a suggestion which we are considering very carefully.

National Plan

Mr. Stodart: asked the Minister of Agriculture, Fisheries and Food by what criteria he judges whether the increases asked for in the National Plan are being carried out.

Mr. Peart: The Annual Review is the agreed machinery for assessing the progress made with the selective expansion programme. The recent White Paper (Cmnd. 3229) sets out the Government's review of the progress both overall and for individual commodities.

Mr. Stodart: Is the right hon. Gentleman aware that a few weeks ago the Joint Parliamentary Secretary, his hon. Friend the Member for Enfield, East (Mr. John Mackie), is reported to have said that everything was going swimmingly with the National Plan, while he himself was seen and heard by millions on television not many days ago admitting that there had been stagnation in the past two years? Could we have some sort of orderly assessment of the situation by his Department?

Mr. Peart: I cannot accept the hon. Member's wild statement. I have never said that there was stagnation. [Interruption.] The hon. Member for the Isle of Ely (Sir H. Legge-Bourke) can ask a question; he need not point at me. There has been no stagnation and no conflict with what my hon. Friend has said over a period of time since the publication of

the plan. The plan is there. I have said that in certain sectors there was not the progress that we should have made, and I said that frankly in my own White Paper.

Mr. Jopling: How does the right hon Gentleman explain the difference between his hon. Friend's statement that we were meeting our targets in the National Plan for everything and his statement in the White Paper that farm output was static?

Mr. Peart: My hon. Friend said that we are generally meeting the target, which is true. In certain sections there have been increases and in certain sections there have been difficulties. I have been frank about this. That is why I have sought in the Price Review to stimulate the dairy herd, in particular, and also pig production.

Wales (Lime Subsidy)

Mr. Gwynfor Evans: asked the Minister of Agriculture, Fisheries and Food whether he takes rainfall into account in assessing the tonnage of lime per acre required by the soil of Wales.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): When advising on liming our staff always take into account leaching and local climatic conditions.

Mr. Evans: Is the Minister aware that the great water resources of Wales, which are plundered and exploited by English industrial conurbations, exist because of the heavy weight of water which descends on our land in rainfall and washes the lime out of the land? Is he aware that in any case the tonnage of lime applied per acre in England over the past 10 years was 16 per cent. higher than in Wales, and will he allow that situation to be reflected in the lime subsidy paid in Wales?

Mr. Mackie: I shall not delve into the early part of the hon. Member's supplementary question. It would be very difficult administratively to allow for the varying conditions all over the British Isles. I should not like to go into the technical details, but I am almost certain that even the low rainfall in Norfolk might on light land cause more leaching than occurs in some of the areas of which the hon. Member thinks in Wales. It


would be too difficult to allow for climatic conditions in this variable island of ours in administering the lime subsidy—even for a Welsh Nationalist Government.

Agricultural Workers

Mr. Hawkins: asked the Minister of Agriculture, Fisheries and Food what action he proposes to take to slow down the decline in the numbers of agricultural workers to the rate suggested in the National Plan.

Mr. John Mackie: The reduction suggested in the programme was 140,000 persons by 1970, but no precise annual rates were given. Although about 60,000 people have left since June, 1964, the rate of outflow fluctuates and is now declining. It is too early to say yet what the figure will be by 1970. This year's award gives further substantial resources for expansion in the industry, but it is up to the individual farmer to decide on his labour force.

Mr. Hawkins: Whilst I am glad that the right hon. Gentleman recognised in his White Paper that output was static because of the labour force's declining, would the Minister tell the House how the Price Review has helped arable farmers and horticulturists, especially those producing root crops, to retain enough farm workers to maintain and increase production from these lands?

Mr. Mackie: I cannot think that my right hon. Friend used the expression which the hon. Member used, that the output was declining because of the reduction in the labour force. We have only to go back over the past 15 years to see that a declining labour force has had almost the very opposite effect in agriculture. [HON. MEMBERS: "Oh."]

Mr. Godber: Thirteen wasted years!

Mr. Mackie: I do not suggest that that was because of the Government or any-once else. It was the farmers that did it. I am sorry, but because of the interruption of the hon. Member's hon. Friends I am not quite sure what the second point was.

Mr. Hawkins: How does the Price Review help arable farmers to retain enough farm workers?

Mr. Mackie: That point was put to me in the hon. Member's area on Monday, when I pointed out that it is amazing what has happened in the past in the mechanisation of dealing with root crops and so on. I do not think that the hon. Member or anyone else would like to predict what mechanisation there may be in the future, when we see raspberry pickers, cauliflower pickers, brussels sprouts pickers and everything else on the stocks at present. I think that the hon. Member is being slightly too pessimistic.

Mr. Speaker: Order. There are many Questions on the Order Paper and I hope that we can help each other by putting questions and answers briefly.

Mr. Hazell: Would my hon. Friend agree that very largely the cause of the substantial movement from the land has been the low wages and earnings in the industry, that the farmers' representatives on the Agricultural Wages Board could have corrected that position and the increased costs involved could have been taken into account in the Price Review?

Mr. Mackie: I agree that there is nothing to hinder farmers paying what wages they wish to agricultural workers.

Wheat

Sir H. Harrison: asked the Minister of Agriculture, Fisheries and Food what progress is being made in increasing the proportion of home-grown wheat in flour.

Mr. Hoy: The usage of home-grown wheat in flour production has increased over recent years, but the quantity used in any year varies considerably with the availability of regular supplies and particularly with the quality of the crop.

Sir H. Harrison: Is the hon. Gentleman aware that there are some very interesting experiments going on with new types of machinery using a considerable additional percentage of English-grown wheat, and, so far as I understand it, the keeping quality of the flour is good. Will he watch the situation carefully?

Mr. Hoy: I can assure the hon. and gallant Gentleman that we are looking carefully at the new developments which are taking place. I am sure that he will


be pleased with the answer which I gave that the usage is increasing.

Sir H. Harrison: asked the Minister of Agriculture, Fisheries and Food what progress is being made in growing Maris Widgeon wheat; and whether he will consider paying an increased guaranteed price for it.

Mr. Hoy: I understand that the production of this comparatively new variety is increasing and that it may now represent 1 to 2 per cent. of the total winter wheat acreage. The answer to the second part of the question is, "No sir".

Sir H. Harrison: May I suggest to the hon. Gentleman that he watches this development carefully, particularly with the prospect of our entering the Common Market?

Mr. Hoy: We are watching it very carefully, because this type could fulfil a very useful function.

Expansion Programme

Mr. Derek Page: asked the Minister of Agriculture, Fisheries and Food what progress has been made in the past two years in the agricultural expansion programme.

Mr. Peart: This is set out in the Annual Review and Determination of Guarantees 1967 White Paper (Cmnd. 3229) published last week.

Mr. Page: Would my right hon. Friend bear in mind that if progress is to be stimulated farmers need assurance about their future incomes as far as possible, and there is concern about what their incomes will be if we go into the Common Market? Will he, therefore, take steps to inquire what farm incomes are in the Common Market countries, which is something that we do not know at present?

Mr. Peart: The latter question is completely different from the Question on the Order Paper. I shall be delighted to answer my hon. Friend if he puts down another Question. I have answered the original Question. The White Paper is there. My Review determinations are designed to that effect.

Sir H. Legge-Bourke: Reverting to the original Question, can the right hon.

Gentleman say how far short of his expectations production has fallen as a result of the stagnation to which he himself referred last Sunday on television?

Mr. Peart: If the hon. Gentleman has read the White Paper, he will see that I stated frankly there that in the dairy sector the herd has not expanded. I said also that because of the working of the flexible guarantee system over a period we have had a severe cut-back in pig production and, therefore, the Review was designed to stimulate it. I was frank with the House, and it is in the White Paper.

Mr. Godber: If it is in the White Paper, will the right hon. Gentleman explain why he did not refer his hon. Friend the Member for King's Lynn (Mr. Derek Page) to paragraph 11, in which it can be seen clearly that the correct answer to the question was, "None, Sir"?

Mr. Peart: The right hon. Gentleman is trying to spread his usual woe and dismay. I am surprised at him.

Mr. Manuel: Is my right hon. Friend aware that his rational and enlightened approach to agricultural problems commends itself to hon. Members on this side of the House and to the vast majority of people in the country?

Mr. Peart: I thank my hon. Friend, but I think that the House must be aware that hon. Members opposite are so politically prejudiced that they will not accept that this is a good Review.

Horticulture

Mr. Derek Page: asked the Minister of Agriculture, Fisheries and Food in view of the fact that horticulture is not included in the Annual Price Review products what assurances he has now given for continued security in the industry.

Mr. Peart: Our policy is designed to help the industry by financial aid and by means of advice and research to make further advances in improving its equipment and practices both in production and marketing. We have extended the scope of the Horticulture Improvement Scheme, are giving grants for new or improved wholesale markets and are


introducing statutory grading schemes for certain important horticultural products. Developments within the industry are again being examined this year in consultation with the farmers' unions.

Mr. Page: Will my right hon. Friend bear in mind that, while growers are most appreciative of the assistance which he has given them, naturally they are very anxious about their future should negotiations with the E.E.C. go ahead? Will he bear in mind that anxiety and the suspicion which many of us have that this is likely to be the hardest hit part of agriculture?

Mr. Peart: As the House knows, I have never disputed that horticulture could be affected seriously by this country unconditionally entering E.E.C. I have certainly taken note of what my hon. Friend has said; one must bear it in mind.

Mr. Stodart: Would the right hon. Gentleman not agree that the one thing that he has not given the horticultural industry is continued security as a result of decreasing the fertiliser subsidy and allowing the prices of fertilisers to increase, all of which are thoroughly important to the industry?

Mr. Peart: The hon. Gentleman knows quite well that the fertiliser subsidy could not go on at the high rate at which it had been running, and action had to be taken. This has been accepted by the industry. He knows, too, that I have already done the things which I mentioned in my reply. I am anxious to have a very competitive horticultural industry.

Beef Production

Mr. Loveys: asked the Minister of Agriculture, Fisheries and Food what progress is being made towards increasing beef production to the maximum extent of technical possibilities.

Mr. Buchanan-Smith: asked the Minister of Agriculture, Fisheries and Food what contribution has been made by the dairy herd to the increase in beef production called for in the National Plan.

Mr. Turton: asked the Minister of Agriculture, Fisheries and Food what was the increase in beef production asked for in the National Plan; and what was the

production of beef in the calendar years 1964, 1965, and 1966, respectively.

Mr. Peart: Under the selective expansion programme, we are looking for an increase in beef production to the full extent of the technical possibilities. The beef herd has continued to expand. More calves have been retained, although calf slaughterings have gone up recently. But the dairy herd has not expanded. Home-fed production of beef in the calendar years 1964, 1965 and 1966 was, respectively, 828, 767 and 809 thousand tons, excluding exports of live cattle and of carcase beef. After considering all these factors during the Annual Review I concluded that additional assistance to certain sectors was needed. This is why I made the award I did.

Mr. Loveys: Is the Minister not aware that this sphere of agricultural production is falling far behind the forecast in the National Plan, as admitted in last week's White Paper? While realising that the greater part of our beef must come from dairy herds, there are far less technical difficulties in increasing production from beef herds, which have only been assisted marginally, particularly with regard to the end product, by the adjustments in the recent Price Review?

Mr. Peart: We took all those factors into consideration in deciding on the award. Looking at it, I think that it is well balanced, and it has been accepted by the industry.

Mr. Buchanan-Smith: Is the Minister aware that the dairy herd actually declined last year? Can he say whether it is still his intention that the herd should increase by 420,000 by 1970, or is that just one more target in the National Plan which has been buried with the plan?

Mr. Peart: I do not know how the hon. Gentleman can say that, if he is really serious about the industry, when we have made an award of 1½d. per gallon to producers and when a considerable amount of money is being pumped into the industry. I wish hon. Members would be more objective.

Mr. Turton: Is not the position about beef more serious than the Minister makes out? His figures now and the figures in the Appendix to the White Paper show that in the three years during which he


has been Minister beef production has been at a lower level than it was in the previous two years when Mr. Christopher Soames was Minister of Agriculture?

Mr. Peart: I have given the figures which were asked for. I am anxious to have production expanding again, and that is why we have made the award which we did. We have increased the guaranteed price. We have increased the calf subsidy by £1. We have increased the beef cow subsidy by £1. We have increased the hill cow subsidy by £1 5s. We have made a milk award of 1½d. per gallon. What more do hon. Members want?

Animal Feedingstuffs (Northern Ireland)

Mr. Henry Clark: asked the Minister of Agriculture, Fisheries and Food what steps he is taking to reduce the current high cost of animal feeding-stuffs in Northern Ireland.

Mr. Hoy: The cost of animal feeding-stuffs in Northern Ireland as well as in Great Britain, is determined largely by the level of world market prices for the main raw materials. The prices of imported raw materials are outside the control of the Government and of the feedingstuffs industry. As the hon. Member is aware, however, the guaranteed prices for pigs and eggs are adjusted upwards and downwards in accordance with a formula based on feedingstuffs prices.

Mr. Clark: While accepting what the hon. Gentleman has said, will he look seriously at the formula to see whether a better weighting cannot be given to producers in Northern Ireland, who get only one-seventh of the say in the formula but who produce considerably more than that when it comes to pig production?

Mr. Hoy: All these things are done in consultation. It is true that farmers in Northern Ireland are in a different position from those in this country. We make certain other allowances to try to meet the needs of Northern Ireland.

Sir Knox Cunningham: Can the hon. Gentleman give any estimate of the effect on the cost of feedingstuffs if the United Kingdom enters the Common Market?

If he has made that estimate, can he tell the House what it is?

Mr. Hoy: I could not give that figure. The question was dealing with Northern Ireland, and I prefer to deal with that one more than the other.

Pigs

Mr. Henry Clark: asked the Minister of Agriculture, Fisheries and Food how many live pigs have been exported to Southern Ireland in the six months up to 1st March, 1967.

Mr. Hoy: 14,809 in the six months ending 31st January. I do not yet have figures for February.

Mr. Clark: Is not the Minister aware that estimates have been published in many newspapers saying that some 200,000 pigs have been slipped across the border? Is he honestly content that the awards made in the Price Review are adequate to stop that flow, when only recently merchants have been offering 10s. to 15s. a pig more in Northern Ireland towns for smuggling into the South?

Mr. Hoy: If the hon. Gentleman has proof of smuggling, perhaps he can supply it, but I am bound to tell him that any breach of regulations on pig marketing in Northern Ireland is a matter for the Northern Ireland Government.

Mr. McNamara: Can my hon. Friend say what proportion of the subsidies for pigs and cattle in Northern Ireland is met by the British rather than the Northern Ireland taxpayer?

Mr. Hoy: We have not divided it up in that way. We make the payments in the same manner both here and in Northern Ireland.

Covent Garden Market

Mr. Allason: asked the Minister of Agriculture, Fisheries and Food what estimate he has made of the additional cost of the transfer of Covent Garden Market to Nine Elms resulting from the Land Commission levy.

Mr. Hoy: Any levy payable by the Covent Garden Market Authority on the disposal of its existing properties will depend on the price obtained for them, which I am not prepared to estimate. The Authority is unlikely to be liable for


levy at Nine Elms unless there is a long delay between land acquisition and the start of building operations. The new market is justifiable on its own merits irrespective of any sums that may be available to the Authority from the disposal of its Covent Garden properties.

Mr. Allason: Was the Minister consulted about the wording of the agriculture exemptions from the Land Commission levy, which seem to be extremely complex and not to allow for cases such as the Nine Elms site which, although necessary for agriculture, is not agricultural land?

Mr. Hoy: Of course, we were consulted about these decisions. If the hon. Gentleman is trying to equate this with facilities provided by local authorities, the two are not parallel.

Farm Incomes

Mr. Jopling: asked the Minister of Agriculture, Fisheries and Food what steps he will take to increase the net income of the fanning community.

Mr. Marten: asked the Minister of Agriculture, Fisheries and Food what steps he proposes to take to increase the net income of farmers.

Mr. Peart: I would refer the hon. Members to the statement I made on 15th March announcing the Annual Review determinations, which have been welcomed by the National Farmers' Union.

Mr. Jopling: Is the right hon. Gentleman aware that his record over the last three Price Reviews has been a classic example of stop-go? Will he repair his somewhat wobbly image by saying that he will not go back to his bad old ways, but in future will build up output and confidence in the industry as he should?

Mr. Peart: Two of the last three Price Reviews were agreed. If the hon. Gentleman carefully examines the awards of those Reviews he will find that they were much better than those given by the Tory Government. This is the best award since 1948.

Mr. W. Baxter: Am I to understand that the Price Review has not been issued to Her Majesty's Opposition? Hon.

Members opposite do not seem to have understood the contents and appear to be the only people in the country who do not recognise that this is a very good Price Review which is accepted by the public as well as by the farmers.

Mr. Peart: I thank my hon. Friend, I get the impression that hon. Members opposite have not read the Review White Paper.

Mr. Godber: If things are as good as the right hon. Gentleman has said, especially with the other agreed Price Review which he mentioned, why has not the income of farmers gone up as it should?

Mr. Peart: With this award there has been an effort to provide farmers with capital to invest in the industry, which is a good thing. We emerge much better from a comparison of the last three reviews with the disagreed reviews of hon. Members opposite. The Tories produce a good review only during an election year.

European Economic Community

Mr. Bryant Godman Irvine: asked the Minister of Agriculture, Fisheries and Food what steps he is taking to provide increased home production to offset any payment under the levy payable if the United Kingdom joins the European Economic Community.

Mr. Peart: In the Review decisions announced last week I have given the industry the means to achieve the selective expansion programme. The programme was designed to meet our present situation, but, whether we join the European Economic Community or not, selective import saving based on increasing productivity is a sound agricultural policy for this country.

Mr. Godman Irvine: In the first 15 paragraphs of the White Paper dealing with the Review which the right hon. Gentleman announced last week there are 15 different examples of decline. Does not that prove that this Review was very much overdue?

Mr. Peart: If the hon. Gentleman says that the Review was overdue, I assume that he welcomes it. I am glad that he is more objective than his hon. Friends.

Mr. Urwin: asked the Minister of Agriculture, Fisheries and Food if he will give an estimate of the effects upon the agricultural industry in the Northern Region, consequent upon British entry into the European Economic Community.

Mr. Elystan Morgan: asked the Minister of Agriculture, Fisheries and Food what estimate he has now made of the possible effects upon Welsh agriculture of Great Britain's entry into the European Economic Community.

Mr. Peart: While some broad assessment can be made of the likely effect on particular types of farming of entry into the Community, it is not possible to give estimates of the effects on a regional basis. This is because there are wide variations in the types of farming practised even within a single county.

Mr. Urwin: Does not my right hon. Friend's answer heavily emphasise the necessity for intensive research in depth into all aspects of our entering the Common Market before an official application is made?

Mr. Peart: I assure my hon. Friend that the Department would assess very carefully what could happen if we had to take this step.

Mr. Morgan: May I ask my right hon. Friend to give this matter his urgent and detailed attention as any association of the conditions of Welsh agriculture on a common par with those of England would give a very misleading picture and probably cause great injustice to Welsh agriculture?

Mr. Peart: I accept that there are considerable differences—for example, the concentration on milk production—between farming in Wales and the type of farming carried on in the eastern parts of the country. We bear these differences in mind.

Mr. Blaker: asked the Minister of Agriculture, Fisheries and Food what he estimates will be the effect of accession to the European Common Market on British growers of lettuce and tomatoes.

Mr. Peart: Assuming no change in present E.E.C. arrangements, our tariffs on imports of lettuce and tomatoes from the rest of the enlarged Community would in due course be abolished; our imports

from non-members would bear the common external tariff; and our domestic production would be subject to the Community's regulations providing for common standards of quality, for aid in setting up growers' co-operatives, and—in the case of tomatoes—for support buying. Increased competition following the abolition of tariffs could be expected to result in some reduction in profitability.

Mr. Blaker: Would the Minister give an assurance that in any negotiations, whether before or after entry into the Common Market, he will do his utmost to ensure the livelihood of such growers—for example, by transitional arrangements?

Mr. Peart: I am glad that the hon. Gentleman is aware of the problems, unlike many of his right hon. Friends.

Hon. Members: Answer.

Earnings

Mr. Bryant Godman Irvine: asked the Minister of Agriculture, Fisheries and Food how the incomes of farmers and farm workers compared with their industrial equivalents in October, 1964; and how they compare today.

Mr. John Mackie: Average weekly total earnings of all hired adult male regular whole-time workers in agriculture in England and Wales in July-December, 1964, were about 71 per cent. of earnings for adult male manual workers in industry in the United Kingdom in October, 1964; and about 73 per cent. in the corresponding periods of 1966. A similar comparison of the average incomes of farmers and other self-employed persons is not available.

Mr. Godman Irvine: Is it not time that the hon. Gentleman had a look at the objective set out in the Labour Party policy for agriculture in which it was said that the industry was to move rapidly towards the industrial equivalent of income?

Mr. Mackie: I think that we are doing that. At least, we have decreased the gap by 2 per cent., which is a higher rate than was the case in the last 13 years about which we have heard so much lately.

Mr. John Hall: Can the hon. Gentleman say what is the percentage return


to farmers on the total capital employed in the industry?

Mr. Mackie: Not without notice.

Mr. Hazell: Would not my hon. Friend agree that the gap would be considerably narrowed if fanners on the Agricultural Wages Board were more generous about wages?

Mr. Mackie: As my hon. Friend knows, the Wages Board is an autonomous body, and I would hate to start to give it advice.

Fish (Price Scheme)

Mr. McNamara: asked the Minister of Agriculture, Fisheries and Food what progress is being made with the introduction of a minimum price scheme for fish; and if he will make a statement.

Mr. Bruce-Gardyne: asked the Minister of Agriculture, Fisheries and Food what progress he has made in studying unresolved objections to the White Fish Authority's draft minimum pricing scheme.

Mr. Hoy: I understand that the Authority is considering the objections it has received before deciding whether to submit its scheme to Ministers.

Mr. McNamara: I thank my hon. Friend for that reply. As it is generally accepted—with the exception of a few hon. Members opposite—that such a scheme would benefit housewives and the industry generally, can he give some indication of when we can hope for its publication?

Mr. Hoy: We have to await the submission of the scheme by the White Fish Authority, and we can then decide what action should be taken.

Mr. Bruce-Gardyne: Can the hon. Gentleman give an assurance that the Government will not impose a statutory scheme on the industry in face of the strong objections from certain sectors of it unless a substantial Treasury contribution is involved?

Mr. Hoy: We will not impose the scheme on the industry, but perhaps hon. Members opposite will make up their minds about whether they are for or against the scheme. They have been

swinging backwards and forwards for a long time.

Mr. Baker: Does not the hon. Gentleman realise that one of the many drawbacks to the scheme is that the Treasury and his Ministry are taking no part in it? If his Ministry took an interest and could persuade the Treasury to take some part, some of the fishing industry's objections would be overcome.

Mr. Hoy: I do not think so. It was the present Government who for the first time agreed to the scheme in principle, and said that when the scheme was put up we would consider whether the Government should give financial assistance. We went further than that, because the statutory procedure provides for safeguarding all interests. There would have to be an affirmative Resolution before the scheme could be approved or otherwise.

Mr. Dewar: Will my hon. Friend promise to look very carefully at the problem of Treasury support for this scheme, because such a move would disarm the residual criticism of, or opposition to, the scheme and the amount of money likely to be involved in Treasury support could easily be found in the savings in operating subsidies to the fleet?

Mr. Hoy: We would have to consider that when the scheme came before us. We have also to consider the recommendations from the Estimates Committee.

Dairy Products

Mr. Buchanan-Smith: asked the Minister of Agriculture, Fisheries and Food what further action he will take to co-ordinate the importation of dairy products with home production.

Mr. Peart: Butter imports are regulated by quota. Broadly speaking, other milk products are freely admitted. The Government have at present no proposals for altering these arrangements.

Mr. Buchanan-Smith: Is the right hon. Gentleman aware that increasing quantities of dairy products are being dumped in this country from Europe, and that skimmed milk from Austria is being subsidised at the rate of £100 a ton? Is he also aware that butter regulations are being dodged by milk products being


presented in a different way, such as in butter oil?

Mr. Peart: The hon. Member, if he makes charges like that, must prove whether dumping has occurred. I have no evidence. If it can be shown that dumping harms our home industry, then we will look at it.

Mr. Brewis: Is it not very disappointing that the forecast of home butter production is down about 15 per cent. this year? Why should this be so?

Mr. Pearl: The hon. Member knows how we concentrate here on the liquid milk market. I am anxious to make certain that reasonable quantities are produced, but we have international obligations in this matter. We have a butter quota arrangement, endorsed by my predecessors, and carried on by me.

Land, Milton Keynes

Mr. John Hall: asked the Minister of Agriculture, Fisheries and Food what reply he has given to the representations made to him by the National Farmers' Union about loss of agricultural land resulting from the development of the new Milton Keynes town in Buckinghamshire at the low overall density of 11·4 persons per acre; and if he will make a statement.

Mr. Pearl: I have not received any representations from the National Farmers' Union on this matter, though I am, of course, aware of the strong feelings expressed on behalf of farmers on the loss of agricultural land at Milton Keynes. As to the overall density of the new town, there is nothing that I can usefully add to the reply given to the hon. Member on 7th February by my hon. Friend the Joint Parliamentary Secretary to the Ministry of Housing and Local Government.—[Vol. 740, cc. 263–4.]

Mr. Hall: In view of the estimated growth in population over the next 30 years or so, and the need to reduce to the minimum the loss of productive agricultural land, would the right hon. Gentleman not agree that he ought to look again at the planned density for Milton Keynes, and other new towns? Will it not be necessary to increase the density considerably if we are not to lose a great deal more production land?

Mr. Peart: I will certainly bear in mind what the hon. Member has said. I agree that we must be very careful about development in respect of good agricultural land. Our aim is to see that development takes place on land which is not so good. I will look at this.

Mr. Stodart: Can the right hon. Gentleman give the House an assurance that when cases of this kind arise, his views are always sought and that he makes those views known with considerable vigour?

Mr. Peart: I can certainly give that assurance.

Cows (Docking)

Mr. Body: asked the Minister of Agriculture, Fisheries and Food what steps are being taken to control the new practice of docking cows' tails in those cases where it is not required by any injury to, or disease of, the tail.

Mr. John Mackie: My right hon. Friend is considering this matter in connection with his proposals for legislation on farm animal welfare.

Mr. Body: Does the hon. Gentleman not agree that this is the kind of practice which may be bringing dairy farming into disrepute? Is he aware that many dairy farmers would welcome legislation to deal with this immediately?

Mr. Mackie: As a farmer who likes to look at his cattle, as well as accept the profits from them, I could not agree more. I would not like to dock cows and I am quite certain that a lot of dairy farmers feel the same way. We are looking at this under the animal welfare legislation which is coming forward.

Strychnine

Mr. Charles Morrison: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied that the licensing system for strychnine poison for the destruction of moles adequately controls the use of this poison; and if he will make a statement.

Mr. Awdry: asked the Minister of Agriculture, Fisheries and Food whether he proposes to alter the regulations relating to the use of strychnine.

Mr. John Mackie: The retail sale of strychnine for controlling moles is restricted by the Poisons Rules to persons who produce a permit signed by an authorised officer of one of the Agricultural Departments. Permits are issued only to applicants who show that they need strychnine for mole control, and know how to use it. These arrangements are kept under review by my right hon. Friend the Home Secretary, who is responsible for the Poisons Rules, and my right hon. Friend, and we are satisfied that no change is necessary.

Mr. Morrison: Can the hon. Gentleman say whether any consideration has been given to restricting the granting of licences to rabbit clearance societies only? Bearing in mind that strychnine is an extremely dangerous poison, can he say whether there has been any research into alternatives for controlling moles?

Mr. Mackie: There has been a considerable amount of research into the control of moles. Meantime strychnine, unfortunately, is the best method. We cannot find a substitute. We are reviewing the rabbit clearance society situation, and will take into consideration what the hon. Member has said. We know the difficulty with strychnine if it is not properly used.

Skin Diving (Shellfish)

Mr. Pardoe: asked the Minister of Agriculture, Fisheries and Food whether he will introduce legislation to ban skin diving for shellfish.

Mr. Hoy: No, Sir. My right hon. Friend has no evidence that such legislation would be justified.

Mr. Pardoe: Is the Minister aware that Britain is one of the very few remaining countries in the world which does not have this kind of regulation? Is he aware that there is a real danger of the extinction of shellfish, particularly in the south-western part of the country? Will he now instruct the marine laboratories, working for the Minister, to carry out a full study of the effects on shellfish life of operations in the vicinity of the "Torrey Canyon"?

Mr. Hoy: I cannot answer for other countries, but I can say, on the available

scientific evidence that we have, that skin diving does not present a threat to the shellfish industry. I can assure the hon. Member that scientific investigations are continuing, and we are keeping in very close touch with these. May I also acknowledge the co-operation that we are receiving from the organisation representing skin divers who are about to introduce a new code of good practice, which I hope will have a beneficial effect.

Mr. Bessell: May I ask the hon. Gentleman if he is really taking this matter seriously? Is he aware that many fishermen who are dependent for their livelihood upon shellfish are suffering grievously as a result of skin diving off the coast of Cornwall? Will he be good enough to look at this matter again, more seriously?

Mr. Hoy: I have looked at this, and I do take it very seriously indeed. That is why I have called upon evidence from so many sources. What I have given to the House is the result of these inquiries. As I have said, I have asked the scientific workers to continue with their researches in this respect and to submit a report.

Farm Accidents (Safety Measures)

Dr. John Dunwoody: asked the Minister of Agriculture, Fisheries and Food when he proposes to introduce further safety measures to protect farmers, farm workers and their families, in view of the increased number of people killed accidentally on farms in England and Wales in 1966.

Mr. Hoy: Draft regulations requiring the use on agricultural tractors of safety frames or cabs designed to protect the driver when his tractor overturns will be laid before the House as soon as possible.

Dr. Dunwoody: I enthusiastically welcome this announcement, but may I ask my hon. Friend to ensure that the time we have to wait for the regulation is as short as possible because frightening numbers of people are being killed quite needlessly in these sorts of accident?

Mr. Hoy: I assure my hon. Friend that the time will be as short as possible—I hope not later than May.

Mr. Peter Mills: Would the hon. Gentleman bear in mind that I have


raised this subject constantly in the House and that since Christmas there have been two further deaths in my constituency? Therefore, the matter is very, very urgent.

Mr. Hoy: It is true that the hon. Gentleman and others have raised this matter over a long period of years. We are taking action and we hope that it will not be long before it is effective.

Mr. Hazell: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the number of fatal and non-fatal accidents in agriculture for the year ended 31st December, 1966; and information on the proportion caused by animals, machinery, or some other cause.

Mr. Hoy: There were 113 fatal accidents and 9,352 non-fatal accidents in agriculture in England and Wales in the year ended 31st December, 1966. Three per cent. of the fatal accidents and 10 per cent. of the non-fatal accidents were caused by animals; 63 per cent. and 21 per cent. by machinery, including electricity; and 34 per cent. and 69 per cent. by other causes.

Mr. Hazell: I thank my hon. Friend for that information. In view of the increased number of fatal accidents and the high level of accidents generally and the declining manpower, will my hon. Friend give an assurance that he will do everything possible to stimulate educational work throughout the farming industry and assist in the formation of safety committees under the umbrella of the county agricultural executive committees?

Mr. Hoy: We are considering my hon. Friend's second point, but obviously safety on the farm must receive great priority. I assure him that we do everything we can—by leaflets, advertising, television, and so on—to try to bring home to people on the farms how important it is that safety measures not only are adopted but operate.

Mr. Hazell: asked the Minister of Agriculture, Fisheries and Food if he will consider the appointment of additional full-time Farm Safety Officers instead of the present practice of using Field Officers spending less than 25 per cent. of their time on farm safety work.

Mr. Hoy: I think that the present arrangement whereby 42 full-time safety specialists have the part-time assistance of some 450 Field Officers throughout England and Wales gives the most effective coverage of farm safety work that is compatible with the efficient use of resources.

Mr. Hazell: I regret to say to my hon. Friend that the workers in the industry are not at all happy with the present situation. Will he therefore keep an open mind on this subject when receiving representations?

Mr. Hoy: We will keep an open mind. At present, this appears to be the best way of dealing with the matter, but we are prepared to consider any other recommendations made to us.

Food Imports

Sir J. Langford-Holt: asked the Minister of Agriculture, Fisheries and Food whether he will take steps to encourage each person to buy 2s. 6d. worth more of home-grown food and 2s. 6d. worth less of imported food as a means of saving £200 million on food imports.

Mr. John Mackie: The Government's general policy on "buying British" was given in an Answer by my right hon. Friend the Prime Minister to the hon. Member for Chigwell (Mr. Biggs-Davison) on 25th October last.
So far as foodstuffs are concerned, we naturally hope that consumers will buy home-grown food wherever it is comparable in price and quality with food from overseas. The Annual Review determinations we announced last week were, of course, designed to encourage British farmers to supply more of the food we want, on competitive terms.

Sir J. Langford-Holt: Would the hon. Gentleman give further consideration to the possibility of a publicity campaign because this is one sphere in which a policy of exhortation would probably be effective?

Mr. Mackie: The publicity campaign which the hon. Gentleman envisages would, I think, be the concern of the various marketing boards and other bodies. We can take the example of how the Danish bacon importers do it. The


general policy is that which the Prime Minister put forward recently

Mr. Godber: Since the hon. Gentleman talks of example, will he ask the Chairman of the Kitchen Committee to ensure that the Catering Department buys English eggs and not Danish eggs as it has been doing recently?

Mr. Mackie: I will draw my hon. Friend's attention to that remark.

Farm Output

Mr. Bruce-Gardyne: asked the Minister of Agriculture, Fisheries and Food whether the target for the expansion of home farm output set out in the National Plan still represents the policy of Her Majesty's Government.

Mr. Peart: Yes, Sir. The Government have made this clear in the Annual Review White Paper published on 15th March.

Mr. Bruce-Gardyne: In view of the negligible progress made in achieving this target, would the Minister consider moving more towards a system of levy control of imports to enable the farmer to get an adequate return from the market which he has not been able to get owing to the Government's failure to provide adequate control?

Mr. Peart: The hon. Gentleman, who asks me to put on levies, is not addressing himself to the Question. He has asked me about the target for the expansion programme. If he reads my White Paper and looks at the award, he will see that we stand by the selective expansion programme.

Land Drainage

Mr Brewis: asked the Minister of Agriculture, Fisheries and Food the increase in costs of tile draining an acre of agricultural land in the last five years; and what extra assistance has been made available to farmers carrying out land drainage.

Mr. John Mackie: In England and Wales the average cost per acre has risen from £35 in 1961–62 to £42 in 1965–66. I am informed that in Scotland the corresponding figures are £44 and £55. Field drainage grants cover half the cost of approved schemes and the Exchequer has, therefore, borne half the increase.
In addition, the Agriculture Bill which was recently before the House proposes a supplement of 10 per cent. for the drainage of hill land.

Mr. Brewis: Is the hon. Gentleman aware that the keeping of land in good heart is very important, but that in the Review his right hon. Friend has found it necessary to cut the fertiliser subsidy and the ploughing grant? Will he consider whether more assistance towards drainage would be a good thing in a future Review?

Mr. Mackie: I agree with the hon. Member that one of the best things to do in farming is to keep the land in good order by drainage and using fertilisers. An average of 50 per cent. in drainage grant is, however, very good, and in hill areas the figure can be a little more with the 10 per cent. supplement, which, I am sure, will help the areas of which the hon. Member is thinking.

PRICES AND INCOMES (WHITE PAPER)

Mr. Speaker: Mr. Stewart. Statement.

Mr. Heffer: On a point of order. As the White Paper on Prices and Incomes Policy has not been available until this very minute, Mr. Speaker, may I ask whether it is possible for the sitting of the House to be suspended for a short period to allow hon. Members to get the White Paper and to read it before we hear the statement by the Minister?
May I also ask whether, in future, the Government will make White Papers available to hon. Members at least an hour before statements on them are to be made?

Mr. Ogden: Further to that point of order. I understand that the White Paper is not available in the Vote Office.

Hon. Members: Yes, it is.

Mr. Speaker: The question of availability of papers before statements on them are given is a matter which the hon. Member must take up with the Government, and not with Mr. Speaker.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. Michael Stewart): With permission, I wish to make a statement.
The Government have been considering in consultation with representatives of management and trade unions the lines on which the prices and incomes policy should develop after the end of June. I am laying before the House this afternoon a White Paper summarising our views on this question. But the House will wish to have a brief indication of the main points in it.
The essence of prices and incomes policy is that growth of money incomes should be related to growth of real wealth, and that movements of prices should give adequate return to producers while ensuring that consumers and workers share in the benefits resulting from improved methods of production. The value of such a policy is that it can give everyone in all walks of life and every place of work a clear interest in increased efficiency; and that it can so safeguard our balance of payments as to make possible sustained economic growth and a high level of employment.
During the last six months of last year the policy took the form of standstill; at present, it takes the form of severe restraint. These forms are a temporary product of necessity. As growth proceeds, prices and incomes policy can become less restrictive till it reaches its full stature as one of the instruments for ensuring that wealth is more efficiently produced and more justly shared. We have yet to reach that stage; but after the middle of this year it will be right to have more flexible arrangements than those now in force.
On the prices side, the Government attach great importance to continued efforts to restrain price increases and to encourage price reductions. The criteria which should govern price behaviour will be those laid down in the White Paper of April, 1965 (Command 2639), which were agreed between Government, management and unions. A necessary part of prices policy is that the voluntary arrangements for early warning of proposed increases should continue to apply and where appropriate we will be discussing development of the arrangements with the Confederation of British Industry and interested trade associations.
On the incomes side it would be inappropriate in our present economic circumstances to reintroduce a positive norm on the lines of the annual norm of

3 to 3½ per cent. which prevailed up to July, 1966. During the 12 months beginning on 1st July next we do not think any group of workers ought to expect to receive an increase in pay simply and solely as a result of the passages of time. Any proposed increase ought to be justified against specific criteria. As in the case of prices, these will be the less restrictive criteria which were laid down in the White Paper of April, 1965. The White Paper which I am presenting to the House this afternoon also draws attention to certain additional considerations which need to be taken into account.
The continuation and development of the voluntary early warning arrangements for pay are of great importance. We welcome the decision of the T.U.C. to strengthen its own arrangements for securing notification and vetting of pay claims. A successful prices and incomes policy depends on a wide measure of agreement between Government, management and unions. It is our intention to encourage the voluntary operation of the policy, and in this context we attach great importance to the rôle of the C.B.I. and the T.U.C.
As the House is aware, Part IV of the Prices and Incomes Act will expire on 11th August, 1967. The Government's objective is to achieve a return to full reliance on a voluntary operation of the policy as quickly as possible. On the matter of reserve powers the Government are consulting further with the C.B.I. and T.U.C. and I shall make a further statement after Easter.
I do not underestimate the problems of achieving an effective policy for productivity, prices and incomes, but I believe that the whole nation now recognises the need for such a policy and will not be content to return to a so-called "free-for-all" which is, in fact, injurious to all, and which strikes its hardest blows at those who are least able to defend themselves.

Mr. Iain Macleod: Is the First Secretary of State aware that that statement is about as clear as mud to the House? Would he agree that it is less than half a statement, because what we are anxious to know are the Government's plans for legislation? In considering that and the consultations that the right hon. Gentleman will be having, will he take into


account the view, which is strongly held not only on one side of the House, that the time has come for the Government to abandon the attempt to enforce a wage policy by statutory means?
Beyond that, may I ask the First Secretary two questions? First, on the sentence which begins, "As growth proceeds"—which is slightly comic, perhaps, in present circumstances—when the right hon. Gentleman suggests that we should return for criteria to the White Paper of April, 1965, how does he reconcile the criteria of that Paper which were in the light of a norm of 3 to 3½ per cent. with the criteria which he is suggesting today and in his new White Paper, which I have not had time to study, for a period of nil growth and nil norm?
The most notable omission from the First Secretary's statement seems to be any reference to the lower-paid worker. Is this to be found in the White Paper, or is it a change of policy? Has the right hon. Gentleman accepted the view, which I put to him last time we discussed these matters, that it is not possible to deal with the problems, many of which arise through family circumstances, of the lower-paid worker through the wage structure, but that if he wishes to move in this sector he should rely upon the social security system?

Mr. Stewart: As I made quite clear, this is not a statement on the subject of powers. It is a statement—and it was necessary to make a statement—on the questions of norm and criteria because that is needed for the guidance of those who will be engaged in wage negotiations. The other statement will follow later.
This is not a period, as the right hon. Gentleman described it, of nil growth. We certainly hope and expect to see a period of faster growth than we now have. [Laughter.] This is not a period of nil growth. If the right hon. Gentleman studies both this White Paper and the earlier one, he will find that this is clearer to those who study it than he supposed. He will find that there is no difficulty about reconciling what I have said about the criteria with the decision that we have had to take about the norm.
We are proceeding first from standstill, where there were no increases except in

a few very restricted cases, to severe restraint, where increases are allowed if they are in conformity with strictly drawn criteria, and next to a period where increases can be permitted in accordance with more generous criteria. I believe that in the next stage after that one can also think of more generous criteria and of a positive norm, but this is something on which we must proceed by stages.
As to powers, the right hon. Gentleman asked me to take into account the views held about the methods by which the policy can be carried out. I wonder whether he agrees with his right hon. Friend the Leader of the Opposition that policy in these matters ought to be carried out simply by restricting demand?

Mr. Iain Macleod: What about the lower-paid workers?

Mr. Stewart: That, again, will be familiar to those who have read the White Paper. The criteria in the earlier White Paper contained a reference to the lower-paid worker, and it is, therefore, also in this one.

Mr. Iain Macleod: I shall confine myself to a last point made by the right hon. Gentleman, as there are a number of other Members who wish to ask questions. I am familiar with the previous White Paper, and the criteria laid down in paragraph 15 thereof, but the right hon. Gentleman must agree that this begs the question. What is a reasonable standard of living, and who are lower-paid workers? Unless he defines these matters, the criteria he is putting forward now in relation to the lower-paid workers are meaningless.

Mr. Stewart: I do not think that the right hon. Gentleman could have been so familiar with the last White Paper, or he would not have had to ask whether there was any reference to the lower-paid workers in this one. That is what he asked, and it showed that he could not have remembered what was in the previous White Paper.
I accept the difficulties of defining the lower-paid workers, but I believe that with the experience we gather, both from negotiation and from the working of the Prices and Incomes Board, we shall be able to have a workable definition. Meanwhile, even during the period of severe


restraint we have been able to make some progress in this field.

Mr. Heffer: In view of the fact that the Prime Minister said that the T.U.C.'s decision on prices and incomes was an historic one, and as the T.U.C. policy stated quite clearly that it did not wish either a continuation of Part IV, or the activation of Part II of the Act, why is it that in the White Paper, which I have only just seen, the Government are proposing to activate Part II, which must, inevitably, lead to a clash with the T.U.C. and a very difficult position for the Labour movement?

Mr. Stewart: I agree that the decision of the T.U.C. about the development of its own powers in this field was an historic one, and a very important element in the development of prices and incomes policy as a whole. I have said that the powers will be the subject of consultation, but I do not believe, whatever views may be held on that, that this detracts from the value of what the trade union movement as a whole has been doing and will continue to do.
My hon. Friend complains that he has only just had the White Paper. This is due simply to the fact that it has been our practice in the House in the past, when a White Paper is laid, for a statement to be made at the same time. This does not preclude the House on a future appropriate occasion from having more detailed discussions.

Mr. Higgins: Will an increase be justified on the right hon. Gentleman's criteria if productivity in an industry goes up by 10 per cent. and the demand for the product being made goes down by 50 per cent.?

Mr. Stewart: If there is a situation in which labour costs are reduced, there will, prima facie, be a case for an increase, yes.

Mr. Maxwell: Is my right hon. Friend aware that the success of the prices and incomes policy has been most beneficial to our export drive, and to saving the £? I would like to ask him, on behalf of my constituents, in particular the railwaymen and the railway workshop men, whether these criteria will permit them an urgently needed wage increase which they deserve, and for which they have asked.

Mr. Stewart: I am certainly not at this stage going to begin applying the criteria all round to particular cases, as my hon. Friend must very well realise. But I agree with the first part of his question, that we have witnessed a very substantial improvement in the balance of payments, in our exports, and in the strength of sterling. I should draw the atttention of the House to the fact that by virtue, in the main, of commitments already entered into there is likely, between the middle of 1966 and the end of 1967, to be an increase in wages of about 6 per cent. over those 18 months. I think that this illustrates the need, on the one hand, for us to give continuing attention to improving productive efficiency, and, on the other, for having an effective prices and incomes policy.

Mr. Barnett: While one must accept that a free-for-all would be harmful, would not my right hon. Friend agree that no incomes and prices policy can be anything more than marginally effective? Would he therefore agree that what we need now is co-operation rather than compulsion if we are to get the growth that we vitally need?

Mr. Stewart: We certainly must have co-operation. It is true that the prices and incomes policy cannot, as a single instrument, deal with our problems. It must be part of the whole range of economic policy, but I believe, particularly in the light of the figure which I mentioned to the House just now, that it is at present an extremely important part of policy.

Sir J. Rogers: In his statement the right hon. Gentleman said that no increases should be granted because of the passing of time. Can he say what plans the Government have for dealing with the decrease in purchasing power of the £ as a result of the inflationary tendency in the economy, which grievously affects lower-paid workers?

Mr. Stewart: If it is a question of arguing the case of the lower-paid workers, it is argued on that criterion, and not merely on the passage of time. What I wanted to make clear was that at the present time, as distinct, I hope, from subsequent periods, we must stick to the point that claims must be justified in the light of specific criteria.

Mr. Biffen: Is the right hon. Gentleman aware that there is widespread and


continuing distrust and opposition to any policy which seeks to convert the C.B.I. or the T.U.C. into a sub-contractor of Government policy? The right hon. Gentleman referred—

Mr. Speaker: Order. We cannot have speeches. Brief questions.

Mr. Biffen: The right hon. Gentleman referred to the T.U.C. vetting wage increases. Who will vet the wage increases of those who are not unionised? Does he hope that the C.B.I. will vet price increases?

Mr. Stewart: There is no policy for making either of these bodies a subcontractor to the Government. The point is that the policy works most effectively where there is a wide degree of voluntary co-operation. The T.U.C. has offered and is practising that degree of co-operation. I agree that we would not get a parallel to that everywhere else, but in its own field it is valuable and should be encouraged,

Mr. Varley: Is my right hon. Friend aware that to suggest activating Part and strengthening it even before Part IV has expired may prejudice and undermine the T.U.C's own voluntary policy? Would not it be better to wait and see whether the voluntary policy works before suggesting activating Part II?

Mr. Stewart: I have said that this is under consultation. It was necessary, I think, to begin that process of consultation at the present time, but we have still to see what results come from it. I do not, in any case, believe that it will undermine what the T.U.C. itself is doing, and I think that this was made clear at the recent conference of executives.

Mr. Richard Wainwright: In view of the supremely important rôle which the Government now propose to give to the C.B.I. and the T.U.C., especially in regard to the activation of Part II, will the First Secretary tell the House as precisely as possible his intentions with regard to the large number of important managements which either do not belong to the C.B.I., or, if they belong, recognise no particular loyalty to it? Likewise, are there not numerous employees who are not effectively associated with the T.U.C.? How are these to be brought within the ambit of a voluntary policy?

Mr. Stewart: It is not only with those two bodies that the Government have consultations—and not only with those two bodies that the Government are in touch on the actual operation of the policy. During the period of standstill and severe restraint we have made the contacts that have been necessary, and they have achieved the success of the policy during that period. We will continue in that way.

Mr. Bob Brown: I concede the success of the Government's policy in containing the increase in the cost of living, but does not the First Secretary agree that one of the greatest causes of irritation to housewives has been the excuse of S.E.T. and other Government taxation for increasing profits, especially in the distribution of food?

Mr. Stewart: I know that there have been some well-founded complaints on that score, but, as my hon. Friend has pointed out, if we look at the general result, as reflected in the very limited increase in the index of retail prices—that increase including factors due to S.E.T.—we can say that the amount of abuse of this kind has been very limited.

Sir E. Boyle: What are the implications of the right hon. Gentleman's statement and the White Paper for negotiations on teachers' pay? Can he say categorically that the Government will not now try to hold up negotiations on teachers' pay? Secondly, does the White Paper mean that the Government representatives on the teachers' pay negotiating machinery are to be rigidly bound by the criteria set out in paragraph 22?

Mr. Stewart: The criteria must be taken as applying to all increases in incomes, but it is not intended to hold up negotiations.

Miss Lestor: Bearing in mind the connection between large families and poverty, can my right hon. Friend tell the House whether the Government are still considering dealing with the question of the lower-paid worker rather by an adjustment in family allowances than by an increase in wages?

Mr. Stewart: Any adequate policy to deal with this problem must contain in it some element of wages policy and some element of social services policy. The Government are aware of that.

Mr. Emery: If, in the right hon. Gentleman's statement, there is not an implication of nil growth, it is certainly only a case of a movement from the snail to the tortoise. What does he forecast as the suggested growth for the coming year? Is it anywhere near what is suggested in the National Plan, or has that been torn up, too?

Mr. Stewart: The rate of growth will not be that forecast in the National Plan, as I have said on a number of occasions. I have also informed the House of steps to be taken to produce a further version of the National Plan. But the point is that the rate of growth, if compared with the figure that I gave the House as to what was expected of wages, exphasises the need for great care in the administration of the prices and incomes policy.

Mr. Emrys Hughes: Is my right hon. Friend aware that there is an impression in Scotland that Scottish workers are not treated as fairly as are workers in England? In view of the handling of the N.A.L.G.O. dispute, will my right hon. Friend assure the House that these blunders will not be repeated in Scotland?

Mr. Stewart: I do not accept that they were blunders, or that, in general, it could be maintained that workers in Scotland were not well treated, or fairly treated, in comparison with others, for this reason: owing to differences in dates of settlements some Scottish workers fared less well than English workers while other groups were more fortunate, during the operation of the standstill. The White Paper states that one of the considerations that ought to be taken into account in the coming period is how people fared under the standstill.

Mr. Nott: Further to the question asked by my hon. Friend the Member for Worthing (Mr. Higgins), if demand increases by 50 per cent. and productivity falls by 10 per cent., will the workers in the industry concerned be eligible for a wage increase?

Mr. Stewart: When the hon. Gentleman brings me details of an industry in which that has happened. I will give him an answer.

Mr. Murray: Will my right hon. Friend take note of the fact that many people outside the House think that the Gov-

ernment have been too easy on price increases? The letters that I have had have shown this. Will he take action to prevent unjustified price increases?

Mr. Stewart: I do not believe that this impression is borne out by the facts. If my hon. Friend is urging that we should have more stringent control over prices, that would be something to be taken into account in any discussion of future reserve powers.

Mr. Patrick Jenkin: Does the right hon. Gentleman recognise the considerable injustice which has been done in the past to salary earners in industry? Does his new statement of policy allow industry to revert to its practice of regular salary increases? Since salary earners are on a ladder, would not this equate them with civil servants, who have been entitled to salary increases all the way through?

Mr. Stewart: I do not think that we should talk of the process of regular increases, because the whole point of this argument is that these were not necessarily regular increases but increases given at discretion, and intended to be in return for the growing value of an employee to his firm. It was for the very reason that they were not regular and assured that they were treated differently during the standstill from those who have assured annual increments.
I agree that that differentiation bore harshly on some people, and it is for that reason removed in the coming period. But this puts an obligation on employers to consider their salary structures and make sure that they really are liable to promote efficiency.

Mr. Park: Will my right hon. Friend confirm that he is aware that the T.U.C. has stated quite explicitly its opposition to the implementation of Part II of the Prices and Incomes Act? Is he further aware that that opposition would be much stronger if the Government made any attempt to strengthen Part II? Is it not clear that the only practicable approach to an incomes policy is a voluntary one, and not one based on punitive restrictions and legal measures?

Mr. Stewart: I do not think that one can draw the absolute distinction that my hon. Friend draws between a voluntary policy and one with restrictive measures.


Any policy has to have behind it a large measure of voluntary acceptance. The point still under consideration is whether any kind of reserve or long-stop powers are necessary as well, in the interests of the great majority of people who want to make the voluntary policy a success. We must remember that in this argument there are very many parties—not only the T.U.C., but managements, the Government and the whole body of citizens.

Mr. Robert Carr: Since such meaning as the statement has hinges on the phrase "as growth proceeds", will the right hon. Gentleman tell us what is the projected growth for this year and for next year?

Mr. Stewart: No, I am not going to give a figure at this stage. [An HON. MEMBER: "None."] That is not so. There are good reasons for believing that there will be growth and that the rate of growth will increase, but I am not prepared at this stage to put a figure to it.
The point made in the statement is that the need for an incomes policy in general is, I believe, now generally accepted, with the exception of some hon. Members opposite, who prefer, as the Leader of the Opposition has suggested, to deal with economic difficulties by damping down. But while the need for an incomes policy is generally accepted, the extent to which that policy is to be severe or relaxed depends on the rate of growth. That is the point made in the Paper.

Mr. Roy Hughes: But does my right hon. Friend appreciate that the proposals to activate Part II may have a serious detrimental effect on the T.U.C.'s voluntary policy, because many trade unions supported that policy believing that the Government would give up their legislative power of veto and control of wage claims?

Mr. Stewart: I believe that the general view held in the trade union movement is that it is vital that the T.U.C.'s own part in this matter should be played, whatever its disagreement with the Government on other aspects of policy may be.

Sir Knox Cunningham: Why will the right hon. Gentleman not give an estimated figure for the rate of growth this year and next year? Does what he has just been saying mean that the

Government's refusal to allow the pay increase to civilian employees of the R.A.F. at Aldergrove will stop in June?

Mr. Stewart: I am not giving a figure now because we are engaging with the National Economic Development Council on the studies which will lead to a fresh version of the National Plan. It would be better not to make pronouncements or prophecies in advance of those studies.

Mr. Wellbeloved: Would my right hon. Friend accept the congratulations of hon. Members on the degree of co-operation which he has achieved by his patient and careful consultations with the T.U.C. and the C.B.I.? Would he give the House a clear undertaking that he will work for the same high degree of co-operation with Members of the House by consulting us before he issues any proposals for strengthening legislation?

Mr. Stewart: I am obliged to my hon. Friend. I have endeavoured at every stage to make this the subject of the fullest possible consultation. I have been conscious during that time that very many particular interests represented in the T.U.C. and the C.B.I. and in other bodies have their claims and their worries about this, but these must all be studied in perspective with the general interest of the community that we shall be able to prevent runaway inflation, that we shall not throw away the advantages which we have gained in our balance of payments and our general economy and that we shall not be driven back again to a situation in which some people may have to suffer from unemployment because others, perhaps better paid, have not been prepared to exercise restraint over wages.

Mr. Hall-Davis: In view of the fact that many people have suffered a fall in their real standard of living of 5 per cent. since 1965, does not the right hon. Gentleman consider it quite inequitable that the passage of time should be disregarded as grounds for any increase for a further 15 months from now?

Mr. Stewart: I believe this to be a necessary step at present. It is no good trying to get out of difficulties like this by the provision simply of larger money incomes, which, in the end, do not leave any of us better off.

Mr. Ashley: Can my right hon. Friend assure the House that there will


be no weakening of the Government's resolve to supervise the orderly transfer from conditions of severe restraint to those of freer bargaining? Is he aware that the Government's determination to maintain reserve powers until a voluntary system can be guaranteed to work will be welcomed on this side of the House and throughout the country?

Mr. Stewart: It seems that I am already engaged in consulting hon. Members on this question. I think, however, that I should only repeat at this stage that this is still under consultation. What the Government must be sure is that, on the one hand, they do not unnecessarily irritate opinion by demanding more powers than may be necessary and, on the other, they do not let the situation run away with itself, so that we come back again to inflation and stop-go.

Sir H. Legge-Bourke: Is the right hon. Gentleman aware that the tendency to give somewhat donnish lectures to the nation on these subjects ties up very ill with the Government's shameless increase in their own expenditure and the taking on of 24,000 more civil servants in one year? May we now have an assurance that, during the coming year, the Post Office, for example, will not be allowed to put up its prices completely regardless of the Government's general policy?

Mr. Stewart: These questions go outside the scope of this statement. The hon. Member will have opportunities to make his complaints on these matters and receive answers.

Mr. Alfred Morris: Is it possible for my right hon. Friend to make any specific reference to how profits and dividends will be treated after the period of severe restraint? Also, would he say how rents will be treated?

Mr. Stewart: My hon. Friend will find these in the Paper. Perhaps I should not go over the whole of it now, but he will find that the whole field of incomes is covered there. I have considered further the question whether there is any unfairness to the House in making a statement when hon. Members have only seen the Paper. That could be avoided, of course, by not making a statement at all, but hon. Members have generally found it convenient, I think, to have an intro-

ductory statement which does not, of course, in the least prejudice subsequent discussion after the Paper is read.

Mr. St. John-Stevas: Will the right hon. Gentleman tell us unequivocally whether he intends to take legislative powers to enforce his norms and, if so, what? Does he agree with the Prime Minister's declaration, reported in The Times, that he did not intend to retreat to fall in with trade union demands for a wholly voluntary system?

Mr. Stewart: I have explained many times that this matter is still under consultation; I will not, therefore, give a definite answer now. The general line of the Government's thinking at the moment has been made known to the parties concerned and it is publicly known, but this is still a matter to be discussed further, before I make a final statement to the House.

Several Hon. Members: rose—

Mr. Speaker: Order. We have a heavy programme. Mr. Stonehouse. Statement.

BRISTOL SIDDELEY ENGINES LTD.

The Minister of State, Ministry of Technology (Mr. John Stonehouse): With permission, Mr. Speaker, I should like to make a statement.
The House will wish to know that Bristol Siddeley Engines Ltd. has repaid to the Ministry of Technology a sum of £3,960,000. The effect of this repayment has been to reduce the profits which the firm made on sales at fixed prices, totalling approximately £16½ million, under a number of contracts for the overhaul of certain types of aero-engines in the years 1959 to 1963. The repayment also includes an adjustment for the fact that, by mistake, double payment was made for certain work carried out on some of these contracts.
The Department's staff had called in 1964 for information about past costs before agreeing further prices. The attention of the senior management of the company was then drawn by its staff to the high profits and it very properly brought this matter to the attention of the Department.
The cause of the excessive profits was that, in each year, the firm submitted very high quotations which the Department's cost-estimating staff did not detect as being above a fair and reasonable figure. I have been assured that the board of the company which, of course, carries the ultimate responsibility for this repeated over-quoting, has given it particular attention. The Department itself might have been expected to notice this over-quoting; I am satisfied, however, that to some degree this lapse can be attributed to pressure of work and staff shortages at the time.
This case emphasises how necessary it is that Departments should obtain the right to equality of information with, contractors when prices are being negotiated. This is an issue on which the Government have been in negotiation with industry for some time and on which, clearly, an early decision should be taken.

Mr. R. Carr: Is it not clear that the company concerned here has behaved in a completely responsible manner, with proper concern for the public interest? Is it not also true that the errors which arose are as much due to faults within the Department as within the industry? May I ask the hon. Gentleman whether this does not emphasise the tremendous importance of coming to a decision on implementing the Lang Report, which has been in the hands of the Government for several years?

Mr. Stonehouse: These unfortunate events occurred when the right hon. Gentleman and his friends were in office. It was their responsibility entirely that the Ministry's staff was inadequate to deal with the problem. This is a case of very serious proportions, where the junior staff in a company failed to co-operate in the right way with the Ministry in submitting quotations for repair work.
I am satisfied that the senior directors of the firm have behaved correctly, particularly during the last few weeks in helping to bring this matter to a satisfactory conclusion. This is a much better situation than the right hon. Gentleman and his right hon. and hon. Friends had when they made a mess over the Ferranti case.

Mr. Carr: Is the Minister's implication about the last few weeks in relation to the directors' behaviour suggesting that

prior to that they did not behave responsibly? Will the hon. Gentleman answer my earlier question about the Lang Report, which has been in the Government's hands for two years?

Mr. Stonehouse: The senior directors of the firm behaved correctly throughout and did their best to advise the Ministry of the way in which the matter was mishandled in their own firm. I pay tribute to the way in which they have brought it to a satisfactory conclusion. However, it has been dragging on for a long time, and the negotiations between my Ministry and the firm have been protracted. It is only in recent weeks that we have been able to reach a satisfactory conclusion. It has been helped by the fact that, unlike the Ferranti case, there has been top security, and we have not had the leaks in the Press which were suffered during the Ferranti affair.
The Lang Report is a matter for current negotiation between my right hon. Friends and the C.B.I. Discussions are still going on and we hope very much that the C.B.I. will respond quickly to the proposals which we have made to it.

Mr. Thorpe: Does this not show, on the Minister's own statement, that the Technical Cost Department is scandalously under-staffed and at the moment is not competent to do a proper job on quotations and costings? In view of the opposition of the Labour Party, quite rightly, to the Ferranti scandal, and of the recommendations of Lang's second Report, is it not time that something was done and that the House should not merely be told that we are waiting for decisions in the future?

Mr. Stonehouse: We have dealt very effectively with increasing the strength of the Ministry staff to deal with these very important questions. The complement strength of the engineers in the Technical Cost Department has been increased by 78 per cent., and the actual strength has been increased by 77 per cent. The technical grades in the Technical Cost Department have actually increased by 23 per cent. We can claim that we have improved the position considerably, I think.

Mr. Dalyell: The Government's handling of this matter contrasts favourably with the previous Conservative Administration's handling of the Ferranti


affair, not least because there have been no leaks to the Press. Although the Bristol Siddeley board has behaved honourably in this matter, is my hon. Friend also aware that some of us connected with Bloodhound on the Public Accounts Committee are alarmed that the problem of equality of information with contractors has not yet been solved? We look forward to his doing something about it.

Mr. Stonehouse: I thank my hon. Friend for his remarks on the first point. We have been glad that this matter has been dealt with in the strictest confidence between the firm and ourselves. That has helped this satisfactory conclusion to be reached.
I agree that it is vitally important that the Government should obtain equality of information and post-costing with these firms.

Mr. Ellis: Is my hon. Friend aware that some of us represent men and women who depend for their livelihood on work with this firm? Can he comment on what the Government's relationships are now with Bristol Siddeley? Can they look forward to having the whole matter cleared up and to a bright future for the firm in association with the Government?

Mr. Stonehouse: Relations are extremely good. Of course, the firm has now merged with Rolls-Royce. On the general relationship, I can give the assurance which has been asked for.

Mr. Onslow: Is the Minister telling the House that Recommendations 37 to 41 of the second Lang Report have been implemented to the full and there is no danger of a situation like this occurring again, or does he wish to qualify that?

Mr. Stonehouse: There is little likelihood, now that the number of technical staff in the Department has been increased, of such a case occurring again. The Government will be helped tremendously if the C.B.I. will respond to the request which we have made to it to come to agreement on the proposals.

Mr. Rose: Accepting that the senior directors have acted honourably, would

the Minister say how they can be absolved from ultimate responsibility for the actions of their junior staff?

Mr. Stonehouse: I am satisfied that, ultimately, they are responsible. But we are pleased that the senior staff have behaved correctly in reporting the matter to us as soon as it came to their attention.

BALLOT FOR NOTICES OF MOTIONS

Regional Government

Mr. Whitaker: On behalf of my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen), I beg to give notice that on Friday, 7th April, he will draw attention to the need for regional government, and move a Resolution.

Technological Achievements (Overseas Publicity)

Mr. Rankin: I beg to give notice that on Friday, 7th April, I shall call attention to the need for more publicity overseas for Britain's achievements in technology, and move a Resolution.

Selective Employment Tax

Mr. John Hall: I beg to give notice that on Friday, 7th April, I shall call attention to the nonsense and anomalies of the S.E.T., and move a Resolution.

BILL PRESENTED

COUNTRYSIDE (SCOTLAND)

Bill to make provision for the better enjoyment of the Scottish countryside, for the establishment of a Countryside Commission for Scotland and for the improvement of recreational and other facilities; to extend the powers of local planning authorities as respects land in their districts; to make financial provision with respect to the matters aforesaid; and for connected purposes, presented by Mr. William Ross; supported by Dr. J. Dickson Mabon, and Mr. Niall MacDermot; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 221.]

Orders of the Day — DECIMAL CURRENCY BILL

Order for Second Reading read.

Mr. Speaker: Before I call the right hon. Gentleman the Chancellor of the Exchequer to move the Second Reading of the Bill, may I announce that I have selected the Amendment standing in the name of the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) and some of his hon. and right hon. Friends, but that I have not selected the Amendment standing in the name of the hon. Member for Ilford, North (Mr. Iremonger) nor that in the name of the hon. Member for Swindon (Mr. Francis Noel-Baker) and his hon. Friends.

4.20 p.m.

The Chancellor of the Exchequer (Mr. James Callaghan): I beg to move, That the Bill be now read a Second time.
This historic proposal that I now submit to the House has been under study and consideration in this country for nearly 150 years. During that period, a number of investigations have been made into the question of "going decimal", but the crucial work for our purpose was undertaken by Committee of Inquiry on Decimal Currency, which was appointed in December, 1961, under the chairmanship of the Earl of Halsbury.
The Committee's terms of reference were:
… to advise on the most convenient and practical form which a decimal currency might take, including the major and minor units to be adopted;
to advise on the timing and phasing of the change-over best calculated to minimise the cost;
to estimate the probable amount and incidence of the cost to the economy …
of its proposals.
The Committee's Report came out in September, 1963, and I take this opportunity of paying tribute, on behalf of the House, to the thoroughness with which the members of the Committee undertook their task. The Report is a model. Except on choice of system, on which the members of the Committee themselves were not unanimous, their conclusions command almost universal support. There is no question relevant to the subject of currency decimalisation in this

country which is not dealt with and illuminated by them, and I thank them for it.
As far as I am aware, the previous Government came to no conclusions on the recommendations of the Halsbury Committee in the period of rather more than a year which elapsed between the presentation of the Report and the General Election—maybe there were other preoccupations. It therefore fell to the present Government to consider and decide on this matter, and on 1st March last year I had the distinction of announcing the Government's decision that the country should change over to a decimal currency in February, 1971, and that the system should be based on the present £ divided into 100 minor units. That is to say, the Government accepted the recommendations of the majority on the Halsbury Committee.
Nine months later, after a great deal of preliminary work and planning, the Government published a White Paper setting out their reasons in greater detail, and the work that had been undertaken. The White Paper dealt with the benefits of decimalisation, the choice of system, the new decimal coinage and the arrangements for the changeover, including the appointment of a Decimal Currency Board. Before I proceed with the Bill, let me say a word about the benefits.
We all count from our earliest days in tens in ordinary arithmetic. In pound, shillings and pence, we count in twelves and twenties. So one of the largest benefits of decimalisation is that it will harmonise money and non-money calculations. There will be fewer chances of making mistakes. It will be easier and quicker. The shopper and the shop assistant will both benefit. So will the schools, where the teaching by the teachers and the learning by the pupils will be easier. Some calculations have been made that show that a very considerable amount of learning time will be saved. In offices, commercial houses and banks, calculations on the decimal system will be greatly simplified. The benefits will be felt quickly by all the nation.
Where conversion has taken place already there is evidence coming in of the advantages that are being felt, and they will rapidly outweigh the actual cost of converting to the new system, which is itself substantial. The Government had


to weigh those two elements against each other, and I think that there is little doubt—I believe that this is not in dispute anywhere—that the benefits are of such a substantial character, increasing year after year, that it is a proper decision to decimalise.
When I made my original announcement in March last year, I stated that there was a period of five years to prepare for the changes. Some hon. Members opposite thought that period ludicrously long, but it is clear as time goes on, and as the Halsbury Committee had foreseen, that the Government were right to decide on a preparatory period of this length because, within reason, the longer the preparatory period the shorter the transition period of dual currency needs to be, and the Government intend to make it as short as possible. Four years of the preparatory period now remain. It is not practical politics to continue to argue about the merits and demerits of various rival systems—they have been argued for a century and a half. The time now really has come to bring the matter to a conclusion. The Government and others need to enter into firm commitments, and must be secure in the knowledge that the new decimal currency and coinage have been given the force of law by Parliament. This particularly affects arrangements for minting the new decimal coinage, and this Bill will give the Government the requisite authority for that work.
The Bill deals with the basic policy issues, but it does not cover all the matters in respect of which legislation will be required before the changeover can take place. In due course, a second Bill will be required to deal particularly with arrangements for the transition period of dual currency, and with such questions as legal tender during the transition, conversion of amounts, contracts, and the amendment of existing Statutes which, of course, refer to the words "pounds shillings and pence". I cannot at this stage be more precise about the nature and scope of the second Bill, since these are matters on which the Decimal Currency Board will be consulting the various interests concerned, and will then make recommendations to the Government. It will be in the light of those consultations which the Decimal Currency Board will undertake that the

provisions of the second Bill will be framed.
I now come to the provisions of the Bill itself. Clause 1(1) deals with the central issues of policy—the choice of system. I dare say from all I have read and heard—indeed, it is hardly possible to get one's voice heard above the din—that this topic will occupy a number of hon. Members, so for that reason I will first deal briefly with the remainder of the Bill and then return to the question of the system.
Clauses 2 and 3 deal with new coinage. There are to be three bronze coins—the new halfpenny, the new penny and the new two penny piece. These are precisely as recommended by the Halsbury Committee. There have been many complaints about the weight and size of the existing penny, and although I confess to an affection for it, I fear that I must agree that the complaints are justified. The new bronze coins will be smaller and less heavy than the present coins, and there will be a further advantage, namely, that the bronze coins will be in weight-value relationship with each other, so that the new two penny piece will weigh twice as much as the new penny, and the new penny will weigh twice as much as the new halfpenny.
This will bring the new bronze coinage into line with the present cupro-nickel coinage, which is already in weight-value relationship. It will obviously be an added convenience to all those firms and businesses which handle coins in bulk—bronze, as well as the present cupro-nickel coins—because it will be possible to assess the value of a mixed bag of bronze coins simply by weighing, as is now done with the cupro-nickel coinage. The denominations of cupro-nickel coins will be five new pence and ten new pence. These coins will be exact translations of the present shilling and florin both in value and in other respects—save, of course, the design. They will therefore be readily recognised during the changeover period.
In the Halsbury's Committee's view, two considerations govern the choice of coin denominations. They should be in a simple relationship with one another, so that payments may be made and change given easily for any amount, and they should also be chosen to enable transactions to be conducted with the


smallest practicable total number of coins in circulation. This choice of coins fulfils those conditions. The Halsbury Committee, however, also recommended the provision of a coin of 20 new pence equivalent in value to four of our present shillings. The Government are not so far entirely convinced of the need for such a coin, although if demand for it should grow there is provision for it to be minted later. Partly in order to leave this possibility open, Clause 2 etxends the powers under Section 11 of the Coinage Act, 1870, to introduce new coins by proclamation.
There is one entirely new coin which the Government propose to introduce, the 50 new penny piece. The reasons for this are economic. The present 10s. note has a very short life—now only about five months—and the costs of issuing replacement notes and withdrawing old ones are considerable and are growing. A coin, of course, is much more expensive to produce than a note, but it has a life of at least 50 years and, taken over that period, the coin is much cheaper. Careful thought is being given to the detailed specification of such a coin and this is still in progress. This is why details of the coin are not included in the Bill but it will be brought in by proclamation in due course if the House agrees.
The only other point I make about the coinage provisions of the Bill relates to the Royal Mint. The manufacture of new decimal coinage is a tremendous operation. Nearly 9,000 million coins will be needed. It is hoped to complete the operation in bronze coins by changeover day. This will help the changeover to be smooth and the transition to be short. It is the Government's plan that with the new decimal coinage factory which is under consideration the Royal Mint will be able to undertake the whole operation but the Mint has other important tasks, including most valuable and remunerative export work which must be continued. Therefore, as an insurance we are allowing for the possibility that some of the new coinage might be manufactured elsewhere than at the Mint. Clause 3 has been introduced to permit this to be done, provided of course that it is done with the authority of the Mint. This is an insurance provision. The aim will be for the Mint to do this operation if possible.

Mr. Eric Lubbock: Can the right hon. Gentleman say whether the numbers of new 1- and 2-unit coins to be minted before change-over day correspond with the estimates in the Halsbury Committee's Report, or has he any reason to change those figures?

Mr. Callaghan: I think they are the same, but the Chief Secretary to the Treasury can deal with that point in winding up the debate.

Mr. David Ginsburg: Could my right hon. Friend say something about the life of the new halfpenny under the new system? How long does he envisage it going on? Secondly, although this may anticipate something that he is to say later, could he comment on whether his mind is absolutely closed to having a yet smaller unit than the new halfpenny?

Mr. Callaghan: My hon. Friend will find that I shall comment on both points later.
Clauses 4, 5 and 6 and Schedule 3 deal with the constitution and functions of the Decimal Currency Board. The Board is already in existence and has begun work. I was able to set it up in advance of legislation because at present its functions are purely advisory but it will shortly have to assume a more markedly executive and co-ordinating role, and for this legislation is necessary.
Clause 5 gives a very clear idea of the functions of the Board and indicates the vital part which it will play in this operation. We have been fortunate in securing the services of very able and public-spirited people to serve on the Board. They were asked to serve in their individual capacities but between them their experience covers the main interests affected by decimilisation.
I come to the choice of system. The course recommended by the majority of the members of the Halsbury Committee and now adopted by the Government is extremely simple. Our present £ should be retained and divided into 100 minor units and a coin equal in value to half the minor unit should be provided for as long as necessary. That is the system and that is what all the argument is about. Before they came to this conclusion, which they did not reach lightly, the members of the Halsbury Committee


considered an enormous mass of evidence. They heard all the arguments for and against a number of possible systems—25 at least. They held 57 meetings, studied 400 memoranda, examined and questioned 150 machine companies and saw 120 witnesses. They commissioned research on practical problems concerned with coin handling and giving change in respect both of the £ system and the so-called 10s. noble system. In this research they had the practical help of Post Office workers, housewives, naval ratings—I do not know why the senior Service was selected, but that always was a good thing to do.

Mr. W. A. Wilkins: Hear, hear.

Mr. Callaghan: My hon. Friend shares my view. The Committee extended its research to bus conductors. In the light of all this evidence the Committee produced a detailed Report after 18 months' consideration recommending by a majority the system which the Government have adopted and which they announced a year ago.
Since we announced our decision, and particularly since the White Paper was published, controversy, perhaps not unnaturally, has mounted, but fundamentally not one of the arguments put forward now is new in this long drawn out controvery—not one. Every one of the arguments that is advanced now was advanced to the Halsbury Committee and considered by the Committee at length. In the Government's view, after we had taken our time to consider it, as in the view of the Halsbury Committee—

Mr. Lubbock: The majority.

Mr. Callaghan: I keep saying the majority. I am at least as entitled to rely on the majority as the hon. Member is entitled to rely on the minority, although he is in a permanent minority.

Mr. Lubbock: Will the right hon. Gentleman allow me—

Mr. Callaghan: Not for a moment. I am sure that the hon. Member will try to catch Mr. Speaker's eye. Then he can flay me to his heart's content. In the Government's view, as in the view of the majority of the Halsbury Committee, these old arguments put forward,

chewed over, regurtitated, digested, regurtitated again, do not constitute a strong enough case for abandoning the £ as the major unit and substituting a system in which the values of both the major and minor units would be unfamiliar.
Naturally the argument put forward by those who advocate other systems dwell on what their advocates consider to be their own particular interests, although I am not sure that they are alone in doing that. Paragraph 96 of the Report of the Committee said:
Organisations looked at decimalisation, as indeed we wanted them to do, purely from the point of view of the problems posed for themselves. We could not, and did not, expect that to give a balanced assessment of all the factors needing to be taken into account before selecting the best system in the general interest. That was our task.
This is also the task of the Government. Our duty as a Government is to analyse the validity of the arguments and then to assess the weight to be given to them I stress this point. There is an important difference between agreeing that an argument is valid and in deciding how much weight to give to it in reaching a final decision.
I should like to give my conclusions before I proceed to the detailed arguments. My conclusion about this controversy—on which I started, I must say, with a very open mind—is that some of the arguments of those who advocate the 10s. noble are valid. Most of their arguments, even where they are valid, are grossly exaggerated in importance. In addition, most of their arguments where valid are true only for a short period of time. Finally, whatever advantage they might claim to possess, they do not outweigh the long-term advantage of keeping the £ which is known and familiar here and throughout the world.
The Halsbury Committee soon decided that the final choice must lie between the £-cent-½ and the 10s.-cent. or noble systems. I think that this view was correct and for this reason I discuss these systems only. I recognise that others have other choices. The Confederation of British Industry, for example, has put forward, after discussion with me, another system based on the £-mil. My hon. Friend the Member for Swindon (Mr. Francis Noel-Baker) and some of my other hon. Friends have put forward a system


based on the £5-mil. There is no limit to the number of systems which can be put forward. I repeat that the Halsbury Committee examined at least 25. There is something to be said for every one of them. We must make up our minds about one, and make them up now and get on with the job.
I therefore hope that my hon. Friend the Member for Swindon will forgive me if I do not pursue his case, which was not regarded as fighting out the final round in the same way that the 10s.-noble unit was regarded as fighting out the final round with the £. The C.B.I. has assured me in its last letter, as I think will be true of everybody else, that, whatever system is chosen, it will cooperate to make a success of it, because of the importance of decimalisation. I believe that we all approach the matter in this spirit.

Mr. Patrick Jenkin: Does the Chancellor of the Exchequer intend to say nothing about the £-mil system, because support comes for it from very powerful bodies indeed?

Mr. Callaghan: I do not intend to say any more than I have said so far. We could go on talking about this for hours. [Interruption.] I do not think that the House will bear with me for hours. I am now talking about the two major systems which have afflicted hon. Members, the two which really stand the test. After all, Halsbury did not rate the £-mil system nearly as high as the 10s.-cent. The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) has illustrated my point that we could go on discussing all sorts of systems. This is why the Government have made a recommendation to the House. Somebody has to choose between all these conflicting elements and systems. It would be a gross dereliction if the Government said, "We do not care. Adopt what system you like. Choose anything you like". All that would happen would be that there would be a majority against any particular proposal at any one time. The Government had to come forward with their own proposal.
The House will recognise from what I have said that I do not claim that the system recommended by the Halsbury Committee is entirely perfect or that

there is nothing to be said in favour of any other system. Indeed, there is no perfect system. In this we differ from our main critics, whose case is suspect because of the intemperate and selective way in which it is argued.
As I understand it, two main arguments are put forward in favour of the 10s. noble—first, that it is easy to associate the new coins with the old pounds, shillings and pence values; and, secondly, that there is an absence of a fraction. These are the two points I should like to meet. It is claimed that, because the familiar shillings are repeated in the new system, this is useful because a high percentage of day-to-day transactions are based on shillings and pence. It is claimed, next, that the 10s. noble has no fractional coin, whereas the £ system has a fraction which, it is said, will wake calculations more difficult. It is also claimed that, if ignored in practice or dropped in a short time, the new halfpenny will lead to excessive price increases.
Let us agree that there are advantages. That is more than any opponent of the £ system has ever conceded to the £ system, but let us agree that there are some advantages of the 10s. system. How much weight do we give to them? That is the next question. Then we must ask: has the system any countervailing disadvantages? Let me draw attention to the selective Mature of the noble lobby. I am not here referring to another place. Those who choose to stress the inconvenience of the new halfpenny in the £ system reinforce their complaint by saying that it will be with us for a very long time and it is impure, as though there were such a thing as arithmetical immorality. However, when they want to stress the dangers of inflation, they say that the new halfpenny is so inconvenient that it will be ignored in practice, thus leading to excessive price increases.
Even the hon. Member for Orpington (Mr. Lubbock) cannot have it both ways to quite that extent in defending the system he proposes. [Interruption.] I am only explaining matters. It is the hon. Member for Orpington who is such an ardent advocate of it. The main argument put forward by the advocates of the noble is that it smooths the change-over period. This is really what they say, that it is easy. This is known—I apologise for using


this dreadful word—as the "associability" argument. That is the word which has been foisted on us all. If I say "smooth changeover", perhaps the House will understand what I am talking about. What underlies this is that with the system using the noble we should retain more familiar coins and that prices would be more easily recognised. This is the root of the case for the adoption of the "noble".
In case anyone thinks that I am being unfair, let me quote from the literature put out about this by the very powerful committee which is co-ordinating the campaign in favour of the 10s-noble. The Committee has been courteous enough to send me a copy of its propaganda. It says that one of the difficulties that it will find is that the familiarity of the public with the £ will go against the 10s.-noble. This is an argument in my favour. For the Committee this is a disadvantage. It goes on to say this:
The Committee decided that the most telling argument and the one which can be put across most easily in visual terms was the 'ease of associability'"—
recognition.
This is not to deny that other arguments have equal force and should, of course, be deployed, but the main emphasis should be on associability.
I take that up now. The Committee relies in its propaganda on the ease and smoothness of the changeover. So the first thing to be made clear from the nature of the Committee's own argument is that it is a temporary argument. The Halsbury Committee considered it. It devoted a whole chapter to what it called the smoothness of the changeover. In paragraph 179, which is entitled, "Associability: a transitional problem" the Committee says
The transitional differences between systems … should probably be measured"—
in years? No. In months? No—
in weeks rather than months.
Let us look at the way the Committee examined this. That is exactly what it said. [Interruption.] If I am challenged, let us look again at paragraph 179:
Associability problems are inescapable … the transitional differences between systems on this account"—
the Committee was talking of the 10s. system and the £ system—
should probably be measured in weeks rather than months.

Let us look at the way the Committee examined this and reached its conclusion. It was not a conclusion which was based on just asking a few people. The Committee conducted tests over a period with the co-operation of two groups of housewives, one using the new £ system and the other the new noble system. The Committee endeavoured to set up realistic shopping conditions, with students acting as shopkeepers and housewives acting as housewives. The Committee entered a number of reservations. Those who conduct scientific tests very properly always do this. The Committee said, "This was not like real life. Allowance must be made for the fact that a great deal of coaching was given".
Its broad conclusion was this. The first group of housewives using the 10s. system was able to reach a standard of competence in five days equal to their standard in using the present £ s. d. Another group of housewives using the new £-cent.-½ system was able to reach the same standard of competence in eight days. This is what we are talking about. The advantage in the practice sessions turned out to be three days of half an hour's instruction in favour of the 10s. unit with an average group of housewives.

Mr. Ginsburg: rose—

Mr. Callaghan: I am in the middle of a very powerful argument and I shall not be turned from it. I have had to put up with a' lot of nonsense over the past few weeks.
No hon. Member can be surprised that in the face of that evidence the majority of the Committee concluded that the smoothness of change-over argument was a matter of no more than a few weeks. But that is the major argument on which those who favour the 10s. noble continue to rely. Experience shows—all of us in the House have had it—that people soon become accustomed to thinking in terms of a new currency. Not every one of our citizens goes abroad, but an increasing number do, and they deal in an unfamiliar language with a currency in which all the units are strange. They rapidly learn to think in terms of the foreign currency for smaller purchases.
It is a fundamental misconception to imagine that, during the period of dual currency working, people will forever be


doing complicated mental arithmetic. That is just not true; it will not be necessary. Change giving is usually a matter of counting, not arithmetic. The situation in this country will be much easier than that for a tourist abroad because the major unit will remain the same if the Government secure the vote tonight. All existing coins of 6d. and above will have exact equivalents in decimal values, and the present shilling and florin will have exactly the same size, shape and value as before, becoming the new five and 10 penny pieces respectively.
Furthermore, it is part of the responsibilities of the Decimal Currency Board to organise, as has been done elsewhere, a big campaign to familiarise the public with the new coinage long before D-day. It plans to use the full facilities of television, radio, films and newspapers. Some time ago the teaching profession offered its assistance, and I recently received from an enterprising schoolmaster an original copy of a text book he hopes to get published, teaching the new system. I was amazed at how quickly I could pick it up, and I think that it will be very easy.
Shop assistants, bus conductors and everyone else who deals with the public in money transactions will be specially trained to help. Many aids can be given to the housewife, such as a small postcard-sized table which she can carry in her handbag or shopping basket, showing the dual prices. Labels in the shops will carry dual prices. Every price will have to be shown in the new and the old currency. Tables will be posted up in the shop so that the housewife can compare the old and new prices immediately. The Decimal Currency Board has already learned a lot from the experience of Australia. I do not think that that is a matter of difference between us. The same process would be needed for the 10s.-noble as for the £.
I do not wish to make too much of the point, but in my view there is a considerable prospect of confusion in the noble system. Some of the values are so close that in terms of price changes the unwary housewife could be more easily deceived under the 10s. system, though that could happen either way, and a great process of education is needed. But there is no

particular advantage in showing that the 10s. system would be so close to the present system that it would be easily recognised, because that could easily go against the housewife on many occasions.

Mr. Wilkins: I should like to go back to my right hon. Friend's reference to people travelling abroad, when he suggested that they easily became accustomed to the different money. I happened to be in France quite a lot when the new franc was introduced, and I remember that almost every time one made a purchase one received one's change in both old and new francs. It was simple to fool the majority of people. [HON. MEMBERS: "Oh."] Yes, it was, because there was a vast difference in the two values of the franc. I hope that my right hon. Friend does not underestimate the amount of confusion that will be caused.

Mr. Callaghan: The House should understand, and I hope that my hon. Friend will understand, that that problem arises whichever system is adopted. It can be the result of going decimal, and that is why it is necessary to have a big educational campaign in advance, which the Decimal Currency Board must see is carried out properly. It is not an argument in favour of the 10s.-noble and against the £ but in favour of a substantial process of education in the meantime.

Mr. Francis Noel-Baker: rose—

Mr. Callaghan: I must get on. I assume that the Bill will have a Committee stage.

Mr. Noel-Baker: My right hon. Friend referred to me. I am grateful to him for giving way. I understand that he does not want to discuss the "fiver", which I hope to raise later, and on which I hope that my hon. Friend will be able to reply. I think that my right hon. Friend would concede that that system would deal with the difficulties which he has just mentioned. The shilling would remain and all prices could continue to be quoted in shillings and other coins which would remain as they are.

Mr. Callaghan: That system would have certain advantages but, it has disadvantages. The whole of my case is that every system has certain disadvantages and that the Government must make


a choice between the various systems. One can say that a particular system gets over a particular difficulty, but one does not get over all the difficulties by adopting one system. I am afraid that that is the conclusion that anybody who studies the matter must come to.
That leaves us with the question of fractions. It is true that calculations with fractions are inconvenient. But only one fraction is involved under the proposed new system—the half, and even that will not enter into all calculations. We are all used to calculations involving halfpennies, and we used to cope with farthings as well. How many of us felt that the farthings and half pennies were a crucial flaw in the pounds, shillings and pence system?
The argument that the new halfpenny might be ignored in practice disregards the force of price competition. I emphasise, because I am anxious that this should not be misunderstood, that in choosing the 10s.-noble there would be no advantage, because in both systems the minor unit will be worth 1·2 pence. The advocates of the 10s. system agree that with it there will be the same difficulty about prices, or lack of difficulty, as with the £ system.
The Government and the Decimal Currency Board must pay serious attention to the question of price changes under the new system. We shall need to consider what steps are necessary to prevent the changeover being used as an excuse for rounding up prices in the old currency to the nearest decimal equivalent. It will also be for the Board to look into the question of rounding down prices and make recommendations to us in due course.
Let me turn to the longer-term question and the effect on prices of the value of the lowest coin. The Halsbury Committee considered with great care the need for the present halfpenny and the effect of decimalisation on prices. After investigation, it concluded that the use of the halfpenny was declining at a rate which, if continued, would result in its complete disappearance from use in the early 1970s. So, irrespective of decimalisation, the present halfpenny would be going out of use in a few years anyway, though the effect of decimalisation may be to speed up its disappearance. The Committee then considered the effect

on prices after decimalisation of not providing for a halfpenny, and of introducing a system in which the lowest value coin was worth 1·2 of our present pence—the same under the system the Government propose or under the 10s. system.
It concluded that if the halfpenny were withdrawn before decimalisation, and if all prices were rounded up to the nearest value in the new currency, price rises equivalent to about 1½ points in the Retail Price Index would take place over a period. That would be the maximum increase; all the assumptions made were unfavourable. But in practice many factors would work the other way. The Committee's judgment, which I see no reason to question, was that the likely result in terms of price rises on decimalisation, as distinct from the maximum result, would be about 2d. in the £—two of our present pence. It would be the duty of the Board and the Government to minimise those adverse changes.
My conclusion is that with the 10s system some weight must be attached to the smoothness of change-over argument and some weight to the fraction argument, but very little to the effect on prices—and, to be fair, the 10s. advocates do not claim much for themselves in that respect.
I therefore do not see how any reasonable man can give those considerations so much weight as to dictate the final choice of systems. Furthermore, the 10s. system has its disadvantages, notably all those that would flow from changing the value of the major unit. Those are not to be airily dismissed.
Now let me deal with the advantages of the system the Government have chosen. Different people give them different weight. For many, retaining a familiar major unit is paramount; for others the main advantage lies in retaining a much more durable system. There is also great advantage in retaining the £ as a major unit of trade and so avoiding any break in our sense of values in money transactions larger than the transactions in day-to-day shopping for food, bus journeys, and so on. It is important internally. But there is also an international argument for retaining the £. I do not believe, and have never claimed—indeed, I am claiming the contrary—that international arguments are conclusive, but they cannot be dismissed out


of hand. I concede that foreign bankers can count. I concede that they can multiply by two. But that is not the point. What cannot be dismissed is that a great volume of world trade today is done in sterling, although that trade and the transactions concerned never touch this country. Frequently, it is done in not very sophisticated circles.
This trade is of value to our balance of payments and we should not therefore risk changing the basic unit which traders in those parts of the world have come to know and to rely upon, and to risk losing some part of this trade, unless there are powerful other reasons for doing so—and I have shown so far that there are no powerful other reasons for doing so. In all the years of controversy these reasons have never emerged.
Secondly, the importance of a currency unit changes as the standard of living rises, and this is nothing to do with inflation; it is a separate argument. There need to be powerful reasons to justify a switch to a major unit of only half the value of the present system. That is why the majority Report of the Halsbury Committee said that to halve the value of the major unit by adopting a 10s. system
seems to go against the economic logic of history".
A high value unit has a real advantage which should not be ignored. In a highly developed and industrial trading economy like ours, where many of the money transactions are large ones, wholly or mainly in major units, the lower the value of the major unit the greater the proliferation of large numbers in national and company accounts; and the higher the value of the units in a currency system—subject to adequate provision for small purchases—the more efficient the system is.
Finally, there are many currency and machine advantages in retaining the £. During the changeover and afterwards, the cost of converting accounts in industry and commence will be substantially lower, and so will the cost of converting most cash registers and adding and accounting machines. On the other hand, under a 10s.-cent system, it would be cheaper to convert coin-operated machines, but I do not accept—as some of the more extreme advocates have claimed—that the total overall cost of

converting all machines will be cheaper under the 10s. system. It will be more expensive than under the £ system.

Sir John Rodgers: On the question of conversion, I would have thought from the knowledge that I have gained that there is little in it. I am not devoted passionately either to the £ system or the 10s. system, but I would have thought that the 10s. system had an advantage in that it allowed many more calculations to be made on existing machines, and was therefore much more flexible.

Mr. Callaghan: That is a technical argument. I, having studied both sides, do not accept that conclusion, any more than did the Halsbury Committee, and more recent developments have shown that it is not borne out in practice. One of the reasons for the long change-over is that with it the obsolescence of existing machines naturally will be greater and therefore there will be more chance of changing them in the natural course of events. I have no doubt that this issue will be raised again.
I have spoken for a long time, but on the other hand, the opponents of the £ system have had a jolly good run for their money for months. I hope that I have made it clear by the detailed and close argument that I have produced that the Government are not just being obstinate. There are excellent reasons for not changing our major unit. Once decimalisation has been decided upon a choice has to be made, and the time has come to make the choice. We cannot postpone it without endangering the programme of decimalisation. At present we have adequate time, but we do not have too much time to complete the preparations that have begun.
No system will please everybody. Different systems affect different sections of the community in different ways. Whatever system is chosen there will be some whose interests would have been better served by choosing the other system, and if we had settled for the minority report we should not have escaped violent controversy in precisely the opposite way. There would just have been different protagonists.

Mr. Lubbock: No.

Mr. Callaghan: The hon. Member for Orpington says "No", but he has been


taking a lot of advice from the Consumer Council. He has been in the forefront of this argument the whole time, and he reached his own independent, wrongheaded decision a long time ago. The Consumer Council Opinion Survey was very interesting on this point. It showed that both the £ system and the 10s.-noble system commanded general popular support, although the margin among the public in favour of the 10s. system was 61 per cent. as against 51 per cent. for the £ system, but that either system would command general support.
It is for the Government to judge the arguments, to put them forward to the House, and then to ask the House to reach a conclusion, but in the Government's view—I say this without heat, although, goodness knows, there has been a lot of heat in this argument—it is my profound conviction, having examined all the arguments and received all the deputations, that the transient advantages that are claimed for the 10s.-noble are so temporary that no decision should be taken on that basis, and therefore that the balance of argument is clearly in favour of the £ new halfpenny system.
I therefore now ask the House to give the Bill a Second Reading.

5.8 p.m.

Mr. lain Macleod: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House, while accepting that a decimal currency should be introduced in 1971, declines to give a Second Reading to a Bill which provides that the basis of the new currency should be the pound—new penny—new halfpenny system.
The Amendment stands in my name and that of my right hon. and learned Friend the member for Wirral (Mr. Selwyn Lloyd) who appointed the Halsbury Committee. I join straight away in the tributes which the Chancellor of the Exchequer paid to that Committee. I shall have much to say that is critical of the majority Report, but it is in no sense personal. It is an exercise of judgment. The Amendment accepts the principle of decimalisation and the date, but disagrees about the unit. I am an unrepentent ten-bobber, and always have been, and I will speak mainly on that basis. But that is not the universal opinion held on these benches.
I have only one political point to make and, with the indulgence of the House, I propose to make it straight away and then to come to my main argument. We know, of course, that there is to be a drilled Whip on one side of the House tonight and a free vote on the other, which always means a large majority for those who put the Whips on.
I think that it is unfortunate—and I use as quiet a word as I can—that this matter should have become involved with whatever temporary difficulties the Labour Party may be having. There is no question but that this has been made a shibboleth by the Prime Minister, and I quote from his famous speech as reported in The Times of 3rd March:
In another unsparingly ruthless burst Mr. Wilson said there would he no abandonment by the Government of their position on a decimalised pound. there would be no preliminary debate, there would be no free vote.
I think that everyone would at least agree that if we are legislating for a thousand years, it is a thousand pities that this issue should have become involved with a matter which concerns the other side of the House. And there I leave it.
In order to try to make my speech of tolerable length in a short debate—we have had a long statement and I understand that there is to be a Royal Commission and the debate ends at 9.30—I shall spend little time following the Chancellor of the Exchequer on what I might call the small change of the argument. I mention briefly the question of coinage. The advantage clearly must be with the 10s. unit which retains the well-known half-crown and, above all, the 6d. whereas the coins of the system which the Government propose are the new halfpenny, which is more or less relevant to the present 1d., but not the present ½d., the new penny, which is about 2½d., and the curious coin to be called the new twopenny piece, which appears to be 4·8 pence. There can be little doubt that the balance of advantage swings there, and heavily, to the 10s. system.
There may well be very little in the argument where machines are concerned, but at least the 10s. system would have the longer-term advantage that it would be standard with other countries. We are told that under the Government's system the banks will ignore the fraction


as an accounting unit. That is all very well for the banks, but it is not so good for the rest of us, because it is only in a pure system, like the 10s. system, that the banking system and commercial accounts will be able to agree, and this seems to be extremely important.
There are many other matters—the question of coin handling and the difficulty of the name, and some tell for one system, and some tell for another. I am content to sum up what I call the small change of the argument with words from paragraph 372 of the Halsbury Report:
After surveying all the main areas … we concluded that, for most but no means all organisations, the 10s.-cent system would be cheaper than the £-cent-½ system for both measurable and non measurable costs but that the difference was unlikely to be large enough to assume more than marginal significance in making our choice of system.
I accept that. I think that the minor advantages are with the 10s.-cent system, but I wish to come to a much more important argument which I should like to put in more detail.
I believe that the real problem is much more profound and that an analysis of it is absolutely destructive of the Government's case. Let us for a moment look around us, and the best illustration is not in the Halsbury Report, but in the Australian 1960 Report which, of course, I have studied. If we leave out of consideration countries like Italy, which have very small units, we find that the world groups itself into three ranges of currency.
There is, first, that where the major unit is between 1s. and 2s., Scandinavia, the German mark, the French franc, Switzerland and the Netherlands, what I might call, with others, basically the European group. These systems are all pure two-decimal systems, that is to say, there is a major unit which is divided by 100 into minor units. For convenience I am calling this the European group.
The second group is that range where the major unit is worth between 7s. and 10s., a group which of course is dominated by the United States dollar, but which also includes the Canadian dollar and which will include the new converts from the £ about which the Chancellor of the Exchequer said surprisingly little today—the Australian dollar, the New Zealand dollar, the South African rand and others.

Those who advocate a heavy unit should note that if we had a 10s. unit, it would still be the heaviest unit of all the major countries. I call this second group, the American or Canadian, or Australia group, the middle group.
In the third group the highest currency unit is the English £ and there are a few similar units. Egypt, Cyprus, Iraq, Libya and so on have decimal systems in which the major unit is somewhere near equivalent to the £ sterling. But in each case it is a three-decimal system. So we have the two lower systems with pure two-decimal systems and a higher group, in which we find ourselves, in which, for purely practical reasons, people have turned to a three-decimal system.
However, the House should note that the Government proposal is none of these. It is neither two-decimal nor three-decimal. It is a £ / penny fraction system. The truth, I am afraid, is quite simple, but once one has taken it in, the conclusion is inescapable: the £ is too heavy to decimalise.
If we wish to keep the symbol of the £—and I understand this—then it is impossible to have a true decimal system. Everyone appreciates this. The Government, of course, appreciate it and have recognised that 100th of a £, 2·4 pence, is too large, and so they have had to lose all the advantages of a decimal system and introduce a fraction. The C.B.I. has seen this and although most of its members would have preferred the 10s. unit, it has tried to avoid this difficulty by reverting to the £-mil system rather than the system of Cyprus and so on which I have described. For many reasons, the three-decimal system is vastly inconvenient and it has as its lowest unit the mil, a concept and not a coin. It also has a very difficult problem of association. The Halsbury Report said that 3s. 9d. was 187 mils—I take its word for it, but I cannot feel that there is any connection between the two.
The hon. Member for Swindon (Mr. Francis Noel-Baker) also recognises the truth of this matter and tries to solve the problem in another way which is by having a still larger unit. But I think that he must agree that the problems which he solves at the bottom of his scale he multiplies at the top, because his major unit of £5 would be no less than 50 times the unit of all our neighbours


on the Continent. One comes to the conclusion that if one wants to keep the £ system, it is not possible to have a pure decimal system with it.
I should like to turn to the international case. There is an international argument, but it is very different from that which appears in the Halsbury Report. The international argument is that if we are to modernise our currency, we should modernise it within the main stream of opinion in the world rather than outside it, as the Government propose.
Of course it would be nice if everybody would adopt the £. It would be nice if everybody would drive on the left-hand side of the road. It would be nice if everybody played cricket. It would be nice if Sassenachs and other heathens would eat haggis and so on. [Interruption.] I am sorry about that last observation. The sore of Twickenham is still burning in my mind and it led me into saying that.
At least we can claim that we have contributed far more than any other country to the culture and customs and structure of the world's governments. English is all but the international language of the world. This House has been called the Mother of Parliaments and the legal systems all over the world are largely ours. But we cannot have everything and I wish that the Government would recognise the one simple and fundamental fact that our currency does not fit, that we cannot make it fit and that we should either leave it as it is and not decimalise—with which I would not agree—or have a genuine decimal system.
For myself, I doubt whether the Government system is even the second-best. For example, in the latest issue of The Banker, quoting an address of his to the Royal Society of Arts, Lord Halsbury said:
Let me say from the outset that there is not very much in it. No 'Currency Commission' has ever achieved unanimity on this point. Neither the New Zealand nor South African reports was unanimous. Mine was no exception.
That is true as far as it goes, but a closer examination shows a more interesting feature. The Australian Report, and I have recently returned from Australia and would like to speak in a moment about what I saw in this context there, was unanimous, and the 10s. system was selected from many others. As I read the

1960 Report it did not give any particular placings, although the inclination seemed to be for second place towards a system which has barely been mentioned today, the 8s. 4d. system of 100 pennies divided into, naturally, 100 pennies.
So much for the Australian system which was unanimous. The New Zealand system was not unanimous, as Lord Halsbury says, but the minority Report, which consisted of only one member, recommended the 8s. 4d. system. Even in New Zealand, a country with the closest links with us, probably closer than any other country in the world, the system that the Government are proposing did not even get placed. In South Africa there was a commission of 15. Of that number, 12 favoured the 10s. system, which emerged as a rand-cent.-½ cent. It is interesting that the ½ cent has been dropped fairly recently, so that this is the equivalent of the 10s. case, which basically, I am arguing.
The minority favoured what they called a £-cent-decime system, that is a £ divided into 10 florins, divided into 10 cents, divided into 10 decimes, which is another variant of the £1mil system, but not the system put forward by the Government. We are therefore in the position that what is proposed is wildly out of line with what has been done by every country in the world, including some of our closest friends, who examined with every care and sympathy the case for the £. The conclusion must be, I say it with regret, but I am convinced of it, that the £ does not fit into the needs of a modern decimal currency system. I wish that it did but it does not.

Mr. Francis Noel-Baker: The right hon. Gentleman was good enough to discuss my proposal, but he did it an injustice when he said that it would be different from others. It would retain the shilling as one-hundredth of the new heavy unit. This would be exactly what a large part of the world already has.

Mr. Macleod: I quite agree, but the idea of having a major unit 50 times the size of the franc or the mark cannot be in line with the famous phrase of the economic logic of history. The Chancellor relies a good deal on the majority verdict of Halsbury. I thought that that argument was weak at the time and I am


bound to say that I think that it has been riddled since. What is the difference between Australia, South Africa, New Zealand and ourselves?
It is the international case; it is that we have to look carefully at international problems of sterling. This case is out of fashion at the moment. The Chancellor said on T.V., just before Christmas, that he was not very impressed with it, and nor am I. But the Halsbury Committee was. Paragraph 373 makes this blindingly clear. The House will recall that a few moments ago I said that paragraph 372 summed up the minor advantages and came down on the side of the 10s-cent, but said that the advantages were not important enough in making a choice of system to assume more than marginal significance. Then it goes on to outline in paragraph 373 what a difficult decision it is. It puts this in heavy type:
The 'international' case for the £ versus the 'associability' case for the 10s. system.
It goes on to say:
… one requirement points to the £-cent-½system, the other to the 10s.-cent system. In our view the differences between the two systems ar fairly small; the real decision to be made is between, on the one hand the associability ' advantages of the 10s.-cent system coupled with, and partly deriving from, the absence of fractions of the cent and, on the other hand, the avoidance of risk to the standing of sterling implicit in the £-cent-½ system.
I could give a hundred other references from Halsbury—there is no possible, probable, shadow of doubt whatever that the Halsbury Committee saw this as a decision, on this point, between these two systems and between the associability and the international case. If one explodes the international case, and the Chancellor by playing it down has done this, then one also explodes the majority opinion of the Halsbury Report. Indeed the whole Report—or to be more accurate, five to one on the Commission—would then come down for the case for the 10s. cent. system.
We know very well that the Bank of England's case was put to the Halsbury Committee and had great influence on it. It is in Appendix 1 and I do not propose to go into it. I usually admire the Bank of England; often I like what it does, and nearly always I like the way that it does it. I am bound to say that its evidence was sadly incoherent; it was technically unsound in suggesting that one

could retain the half-crown and the sixpence with the £-cent-½ system. Manifestly this cannot be done. Where I criticise the Committee, majority and minority Report alike, is that it was far too deferential in the face of this salvo. It did not inquire at all into the reasons given by those whom it said were entitled to speak, and with experience, on this matter. True they are entitled to speak, but a Committee of this importance is entitled to cross-examine and to take evidence from other sources. By far the most interesting comment on this comes from the minority Report paragraph 39 page 164 which said:
The Bank of England advised that there was nothing to be gained by taking direct evidence from foreign bankers on the 'international' case for the £, pointing out that, while some foreign bankers would favour the retention of the £, others would minimise its importance and, in the end, an Act of judgment would still be required.
It is doubly deplorable, deplorable that the Bank of England should put forward that view, suggesting that the Halsbury Committee should not even consider taking evidence from foreign bankers and others concerned, and it was deplorable that the Committee so tamely accepted that verdict. If only it had not done this, I believe that the international case for the £ and the majority Report would have been exploded long ago.
The logic is clear enough. If the international case goes, associability remains. That points clearly to the 10s.-cent system. The only thing to do, and the Chancellor did it this afternoon with considerable skill as always, is to go into reverse and pretend that associability does not matter. This is the line that is now being put forward. In the same issue of The Banker from which I have already quoted there is a note from Australia which says:
The Commonwealth Treasurer. Mr. William McMahon, has announced that the currency decimalisation operation has gone so well that the date for the completion of the change-over has been brought forward by six months to August 1 this year-originally it had been set at two years after the start of the change—over".
He goes on to say that the cost of the switch would be 50 million Australian dollars, against the original estimate of 75 million Australian dollars. He adds that:
The change … had had no discernible impact on the consumer prices index. …


This is a very awkward argument for the Treasury, and with typical Treasury skill, because I admire that Department very much indeed, instead of arguing it, it has adopted it. Much the same now appears in all the letters which Ministers of the Treasury have been sending to Members of Parliament.
I find this in a letter from the Chancellor of the Exchequer to my right hon. Friend the Member for Altrincham and Sale (Mr. Barber):
In Australia it was found that where staff were trained to help customers with their problems there was little or no difficulty; where they were not there was friction ".
Here comes the jump in logic:
Thus it is not the system in itself which makes for a smooth transition".
The answer is—[HON. MEMBERS: "Go on."] It seems that hon. Members would like the next piece read:
I have every confidence"—
That must be a different letter. I also have the letter which the Financial Secretary wrote to my hon. Friend the Member for the City of Chester (Mr. Temple). [Interruption.] The letters say the same thing; they are identical.
The real answer, once more, is the simple answer. Australia got it right not just because its preparations were good but because it picked the right system. This is the answer to the success of the system in Australia and South Africa; and I do not doubt that the same will apply to New Zealand.
I have recently returned from Australia. I spent a good deal of time speaking to people—from bankers to taxi drivers—about decimalisation of the currency. It has gone marvellously well. I remember an article in one of the Sydney newspapers which said that when one saw a story about L.s.d. it referred to the drug and not to currency. This was only a very short time after the introduction of the decimal system.
We have a variant of the new argument about associability which the Government are doing their best to play down. A pamphlet which has been distributed by Lord Halsbury contains, as it puts it, the substance of the talks which he gave to Parliamentary Committees of the two principal political parties. I do not wish to raise the temperature, and therefore I avoid comment on that. Our

meetings are supposed to be secret. I thought that this one was. As far as I know, no authority was given by the Opposition for this.
I do not wish to comment on that. But I do wish to comment on the new argument which emerges triumphantly at the end of this short pamphlet. Under the heading "Evidence from India", it states:
This is of critical importance. It is persistently disregarded because it is ten years old and has lots its news value.
It goes on to explain how India decimalised in 1957 from an incredibly complicated system to its present system, and it says that "the transition went quite smoothly". I have no doubt that it did, partly because in 1957 the vast majority of small transactions would be in kind and not currency, but also because the rupee value of 1s. 6d. is one of the accepted groups and was decimalised into 100 Naya Paise, which is in an exact and pure two-decimal system. This is the reason for the success of the Indian system, and it is odd for Lord Halsbury to say that it is persistently disregarded because one of the bodies which persistently disregarded the advice was the Halsbury Committee itself which had this evidence presented to it, and it appears neither in the majority Report nor in the minority Report. It is slightly absurd that we should be asked urgently to consider it at this stage.
I come to the point about whether associability matters. I have tried to show that the Chancellor of the Exchequer has been driven into arguing that it is unimportant, but I do not think that many people share this view. Every report from every country—and I have studied as many of them as I can—gives the palm to the 10s.-cent. In its simplest form, the argument is that under the 10s.-cent system 13s. is 1·3, which is uncluttered and obvious, whereas under the £-cent system 13s. is 65 new pennies or 650 mils. But I do not think that the evidence shows that the gap will close, although unquestionably it will narrow. The Chancellor of the Exchequer dismissed this matter much too casually.
The comment in paragraph 218 of the majority Report on the report by Dr. Sheila Jones was this:
Dr. Jones's results … suggest that the 10s.-cent system would be easier from the


point of view of paying sums than the £-cent-½ system, that the gap between the two would be very much narrowed, though never entirely closed …
This is a very different picture from the one which the Chancellor of the Exchequer painted today. I feel that we had had far too little scientific examination of the questions of coin handling, ease of assimilation, the education of school children and many other matters. It is amazing that we should be embarking on the world's largest currency conversion on such slender and ill-backed evidence.
One of the most significant sentences in the Halsbury Report is the first sentence of paragraph 95:
Our inquiries suggest that in the last three years there has been a swing of opinion towards the 10s.-cent system, which is now the system most favoured by organisations ".
That is true. The Halsbury Report came out in September, 1963. The Report is talking about a swing of opinion between 1960 and 1963. Nobody can doubt that that swing of opinion has snowballed since. Nobody can doubt now that it is the majority opinion among those in this country—and one must be careful about this qualification—who have studied this matter at all; because millions of people quite clearly have not.
I speak for no particular organisation. But I think that one is entitled to look at the editorials in the major newspapers of this country. Among the newspapers which have had editorials supporting the 10s.-cent system are the Daily Express, Daily Mail, Daily Mirror, Daily Sketch, Evening News, Evening Standard, Financial Times—and "Lombard" has been particularly telling in his column in the Financial Times—The Guardian, Sunday Citizen and The Times.It is perfectly possible that they are all wrong. But we should consider the possibility that they may not be wrong. It is perfectly possible that every country in the world—and I have shown that we shall be out of step with the lot—is wrong. But it is at least possible that the Government are wrong.
If we attach weight to the majority Report of the Halsbury Committee, which, as I have pointed out, was founded on a wrong judgment of the issue, and if we attach weight, which I do since I knew her when I was Minister of Labour

and I have considerable respect for her, to the view of Dame Anne Godwin, should not we attach more, much more, weight to the view of the T.U.C. General Council, which told the Chancellor of the Exchequer that
the bulk of industry, trade and commerce supported the 10s. system,
and it asked him to reconsider his decision.
Some people have had very few letters on this matter. I have had a great number. One becomes experienced in analysing one's letters. One knows the organised letters, the letters from cranks, and so on. The letters which I have received are overwhelmingly in favour of the 10s.—cent system, and have been ever since this issue became a matter of public knowledge.
I quote very briefly two very different points of view. One says:
I write as the Headmaster of a primary school as well as one of your constituents to urge you most strenuously to exercise your influence to ensure that if and when a decimal currency is introduced in this country it shall be based on the ten shilling unit so as to eliminate the need for a half-cent and the consequent complications in calculation which would follow upon the introduction of half-cents. I am certain that decimalisation of the coinage can only be of maximum value to society if the opportunity is taken to simplify our monetary system to the greatest possible extent ".
The other is a very different letter from the Enfield Highway Co-operative Society, which has 64,000 members. It argues the 10s. case, but the only sentence which I read is this:
Since the White Paper was published much evidence has been brought forward of what has happened in other countries who have gone over to decimal currency and the strength and weight of the arguments against the system recommended by the Halsbury Committee have been such that the Government would be fully justified in having second thoughts on the matter.
I agree very much that that is true. The Halsbury Committee reported in September, 1963, and the evidence particularly from countries like South Africa, Australia and New Zealand now certainly reflects upon the judgment of the majority finding.
This is one of the most important debates that we will have in the whole of this Parliament. Let me put as I see it what we are going to do. We are setting out on a course which has been rejected by every other country, including


those countries which have a great attachment to this country and, indeed, to the £ sterling. Secondly, we are opting for a system which will make each and every minor, particularly shopping, transaction more complicated than it need be. Thirdly, we are opting for a system that will not give the maximum benefit of teaching for our children and it follows from this that we are going against, and not with, the economic logic of history.
It is often said of the Chancellor of the Exchequer—and it may be true—that he wishes to be remembered as a Chancellor. Unfortunately, Chancellors are remembered more than anything else for their follies, and I fear that this is one of his. It has been said, and I believe that this is partly why we are in this difficulty, particularly about the vote tonight, that this country loves strong Government. I am not at all sure that that proposition is true—much of our history would contest it—but I am darned sure that it does not like stubborn Government.
I believe that the Chancellor of the Exchequer would gain greatly in stature by changing his mind, because I cannot believe that he does not know in his heart that what he is proposing is wrong. It would be wildly unlikely if the rest of the world were wrong and the Chancellor of the Exchequer alone were right. He is the prisoner of his own cry that the Government must give a lead. Therefore, I ask him, does that apply even on a subject which has nothing to do with party politics, and does it apply even when that lead is known to be, and can he shown to be, wrong?

5.43 p.m.

Mr. R. B. Cant: I would like to begin, as the right hon. Member for Enfield, West (Mr. lain Macleod) began, by congratulating my right hon. Friend the Chancellor of the Exchequer on actually introducing a decimal currency system. This is indeed a very historic occasion. Despite everything that might be said tonight from the benches opposite, I do not think that the Conservatives would have taken this step had they been returned to power. They are making a good deal of political capital.
Having said that, however, I want to say, as the right hon. Member for Enfield,

West said, that I am an unrepentant ten-bobber. My average length of speech in this Session of Parliament has been 11½. minutes and I do not much want to exceed that tonight. I do not, therefore, want to say anything about what might be euphemistically called the democratic aspects of the decimal currency affair.
My right hon. Friend the Chancellor of the Exchequer has been extremely smart in exploiting the democratic machine and bringing this matter to a conclusion. He has caught everybody on one foot, inside Parliament and outside it. My only consolation, perhaps a sop to my self-respect, is that I was shouting about the importance of this matter way back last June. [An HON. MEMBER: "Not loudly enough."] Yes, not loudly enough.
I do not even want to say anything about the international aspects of this argument or the international case, because I appreciate that this has faded into the background. We have had private meetings with the Chancellor of the Exchequer and other people, and this argument has never been mentioned. My right hon. Friend played it down today. I am, however, absolutely certain that this is the decisive argument and is what has persuaded my right hon. Friend to take this course. [AN HON. MEMBER: "A good argument."] Is it a good one? I do not want to be provoked too much, otherwise I might speak longer than I intended.
The elementary textbooks which I read when I was at school suggested to me that the strength of the £ sterling, secular and cyclical, had much more to do with real factors underlying the economic situation and that even when we had our financial problems associated with the fact that we were a reserve currency, and, even more important, a world trading currency, these stemmed very largely from a deterioration in our basic economic situation.
Perhaps the Chancellor would have been persuaded by the fact that within 1,000 years we shall have an international unit in currency, even a European unit of currency as we are going into the Common Market. I do not, however, want to say anything more about that. I do not even want to discuss associability at any length. Here again, however, just as the international argument has


changed, so the associability argument has become distorted.
I look at this matter from two points of view. First, the right hon. Member for Enfield, West quoted from paragraph 373 of the Halsbury Report, a decisive paragraph which states, in effect, that the decision is one to be taken between, on the one hand, the international argument for the £ and the associability argument for the 10s. unit, on the other hand. And yet Lord Halsbury ends up on page 11 of his pamphlet by dismissing this entirely and saying that in terms of associability the implication is quite clear that one has no advantage over the other. Why in the Report did associability loom so large in favour of the 10s. unit and in Lord Halsbury's privately circulated document disappear entirely from the scene?
I have just one other word on associability before I get on to what I really want to say. Not only has the argument changed, but it has become distorted in this sense. If we look at the Financial Times this morning, we see a letter from the lady who did the research for the Halsbury Committee. She is most upset about this because, she says, it is absolutely wrong to talk as the Chancellor does about three days' shopping practice being the difference.
What, in effect, that lady says is that we must accept that some elderly or less intelligent people might take months to learn the £-cent.-½ system while some may never master it at all.

Mr. Joel Barnett: Would not my hon. Friend agree that some elderly people have not mastered£s. d. either?

Mr. Cant: I would not agree, and I am an elderly person. The lady who did the research for the Halsbury Committee then talks about the average housewife and says that these results were achieved only because perfect conditions operated. I would like to discuss this matter at length, but this associability argument is getting into rather deep water.
In my remaining few minutes I turn to paragraph 40 of the Halsbury Report. I used to be a local preacher and perhaps I may be permitted to take this paragraph as my text. This is an intensely practical

problem and one which was not discussed in detail even in the Halsbury Report. The right hon. Member for Enfield, West said that the Halsbury Committee was perhaps not scientific enough in its approach to this problem. I hope to prove that that is a correct statement.
Paragraph 40 says:
Within limits the higher the value of the major unit"—
It is the advantages of the major unit that we are discussing—
the more convenient and manageable it is for the recording of large amounts—wages and salaries, company and national statistics, prices of suits, of clothes, cars, houses … In a highly complex trading and industrial economy like ours, such a heavy major unit is perhaps more particularly useful.
The second point given is:
It has the further advantage in that it tends towards a more economical use of business machines. If the choice lies between a number of straight two-place decimal systems"—
note that—
the one with the heaviest major unit will make the most efficient use of machines capacity.
Let us look at this question of "convenient and manageable". This really has not been gone into in a scientific way, in the sense that we would apply time and motion study to the use of notes and coins. Let us assume that we are buying a house for cash, and let us assume that the house costs £2,550 15s. 6d., which, of course, it could cost with legal charges, estate agents' fees, and so on. We would assume that the heavy £ unit would have an advantage, because it would need fewer coins. But this is incorrect. Certainly, with a large purchase like a house, it needs more units to express this in decimal terms. If we buy a suit, we might expect that if we paid cash for it, the bigger unit, the £, would have the advantage. But not at all. I will go into detail if hon. Members want me to. I am a fanatic about this point.
If we look at this argument in economic sense, if we ask ourselves what is the likely relative effect of a £ unit and a 10s. unit, we might think that the heavy unit would have the advantage. But all Australian experience suggests that from the point of view of, say, a deflationary effect on the economy, the 10s. unit increases the marginal propensity to save and, therefore, reduces the tendency to


inflation. A moment's reflection would prove that point.
To go back to my original point about convenience and manageability, we are really concerned, not with buying cars, houses and suits, but with the average transaction. This is something about which we do not really know very much. The Halsbury Committee got a figure From some people who gave evidence, but we do not know much about the nature of the average transaction in this country. What is the average transaction? Is it £1? Is it 5s? It is assumed to be something around 5s. or 6s.
If we are thinking of the convenience and manageability of the unit, we have to think of it in these terms. What has never been done in this country—until I looked at this problem, I may say, with a certain amount of conceit—and certainly was not done by the Halsbury Committee, is to take, say, transactions from 1d. to £1. Let us assume that we are making a great number of purchases, say 200. Let us estimate how many coins and notes this country would handle in one week in this context. We are told that there are 20 million families, that they make 100 purchases a week, and that this involves 2,000 units of currency. If we go right from 1d. to £1, if we calculate how many coins and how many notes will be required under the £-cent-isystem and the 10s.-cent system to transact these purchases, giving an appropriate amount of change—if we undertake this time and motion study, which I think is absolutely vital, and if we make one assumption, that we do not follow the Memorandum of Dissent and use the 25 cent, but follow New Zealand and use the 50 cent, which is the optimum, then the actual economy for persons making 200 purchases a week would be 160 coins, and, for the country as a whole, this would be a saving of 1·6 billion coins in use every week.
This is the sort of practical problem with which the Halsbury Committee should have been faced. If I may go back to the point which the Chancellor made, in making this calculation one sees that he is making a mistake in not using the 20 cent coin, because time and time again we are faced, in paying money or giving change, with ten-plus-ten-plusten-plus-ten, or ten-plus-ten, and the use of the 10 cent would greatly facilitate

operation. But think of the burden of 1·6 billion extra coins and notes having to be used every week in this country to make average transactions. There is the question of trouser pockets. There is a sense of anticlimax about that. I am thinking of the Chancellor of the Exchequer bothering to save £750,000 though not producing this 10s. note; yet he is going to produce all the extra coins required because he has adopted this particular system.
I should like to say a lot more, but I have spoken for too long already. I should like the Chancellor to get somebody to make this calculation. I am prepared to give him my papers if he wants them. He would then see how much more economical is the use of the ten shilling system in practical terms, and he would see the real significance of the words "convenient and manageable".
May I say one word on inflation. I have already made some reference to this. If the average purchase is around 5s. or 6s. now, there is no doubt that as the ten-shilling system gathers momentum in terms of its advantage, as one goes up from that point, as inflation grows, which it will with any Government, the advantage of the ten-shilling system will be increasingly demonstrated.
My second point concerns the heavy unit and the thousand years. The Halsbury Committee gives it as an argument for the £-cent-½ system that the ½ will disappear in 20 years. This involves a 380 per cent. increase if we are going from a minimum unit of ½d to a minimum unit of 2·5. If the ½d. is dropped out of our calculations, with an average wage of £20 a week, we must assume an average wage of £80 a week before we can equally drop out the 2·4d. If we are thinking of a thousand years, we do not need to worry about the unit. The formula is merely to shift the decimal point. In my lifetime the franc has been 20 to the £, 1,300 to the £, and 13 to the £. It is as simple as that, if we have a pure decimal system.
The other aspect of this paragraph was the more efficient use of business machines. This is really the most remarkable part of the Report, because the assumption is that if the choice lies between a number of straight two-place decimal systems, then the heavy unit will have the advantage. The Halsbury


Report then goes on to recommend a three-place decimal system in which all the advantages are completely undermined.
I do not want to go on to discuss this matter in any detail, although, being a fanatic, I would be happy to do so. I cannot help but feel that this is a rather sad day for this country, if I can speak without emotion, because it held out hopes of a move forward into a rational system which other countries are adopting. I think that the Chancellor has allowed tradition to triumph over reason, and that he has done this in the context of what must be a rare spirit of unity amongst people about what they want, both inside this House and outside.
Some people say that it does not really matter. The Prime Minister at this private meeting, the account of which I read in The Times, said rather flippantly,
Who is going to the barricades for decimal currency?
Nobody is, but I think we have to accept that this piece of legislation is very different in its impact on our society from many others which may appear to be equally important, because here we are doing something which will affect the daily lives of people for a long time to come. Unlike a Finance Act, or a Companies Act, or some other things, this is going to be with us for a long time to come, and I regret it.
I am almost tempted to quote the rude comment on the Chancellor of the journalist who said:
My mind is made up, but do not confuse me with facts.
Having said that, I assure my right hon. Friend—not that he cares two hoots about this—that, being a loyal backbencher, I propose to limp into the "Aye" Lobby tonight and register my half-hearted support for this half-baked, ½-cent system.

6.3 p.m.

Mr. John Smith: Although I felt it my duty to try to do so, I am rather sorry that I managed to catch your eye, Mr. Deputy Speaker. I have no wish to upset the Prime Minister's dumb friends by supporting the Government, still less upset many of my colleagues and many of my constituents who, for excellent reasons, are 10-bobbers. It is very tempting to

let the Government sweat it out, but this is a very important matter, and so long as there is the slightest risk, however small, that the Government might listen to what are loosely termed their supporters, I must declare that, after studying this question for several years, I agree with Lord Halsbury's choice of the major unit.
That decision is strengthend by having served on a Royal Commission with Lord Halsbury for seven years. I feel that it would be taking a great deal on oneself to disagree on matters of reasoning with such a clear-headed man as that. It is a finely balance choice. Neither system is perfect, both systems will work, and either system is a great deal better than what we have at the present; but I think that the £ has it.
I shall not rehearse all the arguments, with which we are all familiar. I would simply like to make one or two additional points, including one to do with the nature of the currency itself, which has not been dealt with at all.
First, we are all agreed that the system must be lasting. We do not want to do it again, and in spite of what the hon. Member for Stoke-on-Trent, Central (Mr. Cant) said—and I have heard both his speeches and respected very much what he said—the cost of rejuvenating a decimal currency system is not at all a small matter in our complex economy. It is not simply a question of moving the decimal point. It is a very expensive business, involving reconstructing the programmes of business machines all over the country, and it is a cost which will greatly increase in future. We do not want to do this again.
Clearly the £-cent system will last longer, but it has this ½-cent which is a draw-back. I think a good deal turns on when we think the ½-cent will go. Lord Halsbury and the Government have referred to improvements in the standard of living; Lord Halsbury also certainly referred, rather coyly, to inflation. The conclusion was that the ½-cent might go in a generation. I think that it will go far sooner. For example, in 1963, when Lord Halsbury was dealing with quite another point, he referred to three things which cost 3d.—newspapers, letter post, and bus fares. That now reads like ancient history.
We do not, of course, approve of inflation any more than we approve of fog, but it is very silly, and indeed hypocritical to ignore it. Inflation and our method of Government are absolutely inseparable. We shall always vote ourselves more than we can afford. Inflation is attractive to voters, and it is attractive to Governments. Inflation is for Governments what death is for doctors. Inflation offers the Government not only the chance of burying their financial mistakes, but of turning today's extravagance into tomorrow's bargain. Inflation is, of course, damnable. It is a method of living off one's children, but it is attractive and so we shall have it. We should therefore go for the larger unit, ephemeral ½-cent or no.
On the question of inflation, the £-cent system, if there is any difference between the two systems, is slightly less inflationary. The difference between the two systems at the outset can come only from firms ignoring the ½-cent in the £ system by rounding up or rounding down to the whole cent worth 2·4d. Lord Halsbury did a similar calculation when he was considering whether to abandon the existing halfpenny. He concluded that this would have the effect—the Chancellor quoted the full effect, but what is important is the marginal effect, because both systems have an effect of an increase of three quarters of a point on the cost of living. Far fewer firms would abandon the ½-cent than in Lord Halsbury's calculation would have abandoned the halfpenny, and therefore the effect is unlikely to be any greater.
Moreover, the continuing inflationary effect of a £-cent system is likely to be less than that of a 10s.-cent system. What speeds inflation is frequent interconnected rises of price. To take an extreme example, weekly alteration of wage rates tied to a cost of living index is a great deal more inflationary than wage rates which are changed at less frequent intervals. I feel that large "steps" at the bottom of a currency are a positive advantage, because they will mean that rises in price will be delayed until costs pass the middle point. Therefore, in terms of delaying rises—which is part of any policy, pay pause or freeze, for controlling inflation—the £-cent system has a positive advantage.
There are further advantages in having a "coarse-grained" system—that is to say, one with a large minor unit.

Mr. Bernard Weatherill: I do not know whether my hon. Friend is speaking as a banker, but I have heard it said that banks will ignore the half-cent. Can he confirm that—because ordinary traders will not ignore it?

Mr. Smith: I understand that banks will. They already ignore the halfpenny. On the subject of a "coarse-grained" currency, I feel that, rather in the manner of Parkinson's first law, people will use a unit of currency, however small it is, whether or not they need to do so. The bank for which I work gave up using the halfpenny without ill effects in 1761, when it was worth at least eight or ten times what it is worth now, and indeed before the bronze penny had been introduced. It would be quite simple for traders to use fractions and for people concerned with price shading on paper to use further decimal points, but for banks to deal only in a larger unit.
The principal advantage for ordinary people in having a large higher unit of currency is that small prices are represented by smaller numbers, and small numbers are very much easier to reckon in than are large ones. The £-cent system has been criticised for being too "coarse-grained", but it is possible for calculations to use as many decimal places as are required. But if, on the other hand, we have a small unit we are condemned to use it for calculations however large, and for which—and they are probably the more important calculations—the £ itself is already too small a unit.
The £-mil system is attractive on many counts, but it has two crippling disadvantages. First, its bottom coin is too small to use and, secondly, people cannot reckon in their head with the three-figure numbers involved. Therefore, regretfully I rule out that system.

Mr. Patrick Jenkin: Does not my hon. Friend recognise that both these difficulties can be easily surmounted? The smallest coin could be two mils, which would be almost the equivalent of a halfpenny, and by introducing the florin as one-tenth of the £ the difficulty referred


to by my hon. Friend of calculating to three places would also be overcome.

Mr. Smith: I do not want to have a sustained rally with my betters on this point. I merely suggest that we could not do that, because it would not be possible always to give change. If we had a system involving only even coins at the bottom and odd ones higher up there would be great difficulty in giving change.
I now turn to something less controversial but more interesting, namely, the coinage itself. The Bill proposes that we shall have two new cupro-nickel coins and that these should be of the same size and weight as the shilling and the florin. Could they please be lighter? It is proposed that they shall be the same weight as they were in 1816, when their purchasing power was many times as great as it is today. When the bronze coinage has been lightened, as proposed, the cupro-nickel coins will seem to be even more clumsy and cumbersome than they do at present.
Almost all coin-accepting machines work on diameter. Therefore, the simplest way to lighten the coins would be either to make them of another material, which I do not suggest, or to make them thinner. Thin coins are very handsome. If the Chancellor would examine the last shilling to be minted before 1816, or the present Austrian ten-schilling piece, he will see what I mean.
There are two other advantages in my proposal. The first relates to the major task of getting the old coins out of circulation and the new ones in. They will circulate side by side for a period, and then the old ones will have to he taken out of circulation and reminted. The business of sorting will be made easier if the new coins are of the same diameter as the old, but of a different thickness. They will not be compatible for weight during that period but afterwards they will be, and there will be no more inconvenience in getting an old florin in a shovelfull of new coins—if the new coins are lighter—than there now in getting a foreign coin in a shovel-full.
Further, the Chancellor wishes to introduce a 10s. coin, which I regard as very sensible. But this will have to be either a cartwheel if it is compatible for

weight, or made of a different metal, thus producing a three-tier coinage, in which the top tier is not compatible for weight with the middle tier. If, on the other hand, he will do his level best to make the new cupro-nickel coins lighter he may be able to make his top coins compatible for weight with the middle coins, and thus avoid having three tiers. I should be grateful if the right hon. Gentleman would ask someone to get him ten English shillingsworth of Austrian nickel coins so that he can see whether he does not like them better than the coins that he is at present proposing to give us.
I want to deal briefly with the question of associability. Much has been made of this. For shoppers, the associability of the 10s. system is very much better but I think that we greatly under-estimate the talents of shoppers. Anybody who has ever bought a bar of chocolate in a foreign airport, where people not only associate two currencies at a time but, often, several at a time, and give change in them, will know that we have overdone this argument. Nevertheless, associability is very important for records and for budgeting, and for thinking.
The £-cent system is indeed already used in certain records. It is used by the Navy—or at least it was in my day. I do not know whether the Chancellor experienced this, but in my time pay in the Navy was dealt with in £ notes and florins only. Moreover, associability for shoppers is a temporary need, but for records and statistics it is a permanent need.
Surely the permanent part of associability—that is to say, continuity—is much more important than temporary ease. In general, we are much too liable to say that a system is easy and to choose it simply because it is, without looking further ahead.
I want to say a little about the international case. As the Chancellor says, most gnomes can multiply by two. I have seen them do it. But not all foreigners are gnomes. Most of them are traders. The Chancellor did not give the fraction, but half of all sterling transactions take place between foreigners. For many years I have been a director of the Ottoman Bank, which deals with countries where a high proportion of these transactions take place. I know what a lot of our customers are like.


Many of them are good traders who know everything there is to be known about Mombasa Robusta, or whatever it is they trade in, but are not very up to date on current affairs in Britain. All people, especially such people, are creatures of habit, just as we are creatures of habit, and a useful analogy can be drawn between what might happen with them with a 10s. system and what happens with us in our own dealings with our own bank. From time to time one is persuaded into making a banker's order for some dim cause or other. Later, the charity or whatever it is asks if one would make another order, as it has changed its bank. One does not always make another; sometimes one reviews the matter and realises that the money could be used better. If you ask someone to do something in a different way he may stop doing it at all: you do not transplant the flowers in your garden just because you don't think it will do them any harm; you only do it if you've absolutely got to. The great thing with sterling is not to talk about it. Sterling always strengthens a little when this House is in recess. Therefore, I think the international case for the £ reinforces the domestic case; I hope that we will not be financial "Little Englanders" over this; and I hope that the Chancellor will stick to his guns.

6.22 p.m.

Mr. Richard Buchanan: I am sorry to have been called immediately after the hon. Member for the Cities of London and Westminster (Mr. John Smith), because he is a "pound man" and so am I and the debate would have been much better if I had followed a "ten-bobber".
The debate has shown that this affects everyone in the country and every purchase. This would be a fairly easy exercise, in that the obvious minimum purchase is bound to be the minimum fare on any public transport vehicle. The proposed coins are very much along those lines. This matter affects us all in our everyday lives, so it is not a matter for superficial judgment, in the sense that 6d. is handy for one-armed bandits and half a crown for cigarette machines. We should judge not for the short term but for the far future. We are all affected

in different ways, and those with different interests react differently.
As the Chancellor said, if the 10s. system had been chosen, there would have been an even louder outcry. The Government made the right choice. No one, not even the Halsbury Committee, would claim that it is perfect, but I hope that the advocates of the 10s. system would not claim the same thing for theirs. Both have advantages and disadvantages.
There was little enthusiasm for the 10s.-cent system until the present decision was announced. The bulk of the Government's case must be that they are planning for the future and must therefore plan a coinage which will endure. Inflation is not caused by a change in currency but by government decisions throughout the world. My Government was doing very well after 1945, until another Government decided to go to war in Korea. The importance of currency units inevitably lessens with time. This is not a recent phenomenon. I am not making a political point.
One of the advantages of the £-cent system is that when the new halfpenny becomes redundant we can get rid of it with no risk. It is worth noting that much of the argument against the system is that it is not a pure decimal system and that the new penny is too high a unit. The hon. Member for the Cities of London and Westminster pointed out that until 1939 banks did not officially recognise the halfpenny for accountancy purposes. We managed very well with a unit much larger than the proposed new penny.
The halfpenny until recently was used in small transactions, but our currency has declined to about one-third or a quarter of its 1939 value, when a penny bought three or four times what it buys today. Therefore, if the smallest unit for accountancy purposes in 1939 was a penny, it would today be about 3d. or 4d. The Government proposal for 2·4d. is in fact worth less than the 1939 penny. We will be better placed for flexibility for smaller transactions than we were in 1939.
I have a booklet entitled "Shaws' News" issued by Shaws' Biscuits Ltd., the kind of document which one normally only glances at, which gives an example of the retail price in 1939 of a 7½ oz. tin of Shaws' Yorkshire Parkins, which


are delicious biscuits. It was 10½d. Today, it retails at 2s. 1d., or 25 of the present pennies. It would cost 10·4 of the new pennies or, numerically, practically the same as its pre-war price.
When decimalisation was discussed in the 1930s, there was good reason for insisting on a minimum unit much smaller than one-hundredth of the £, but, with the £'s present purchasing power, surely no reasonable objection could be taken to the proposed new penny—

Orders of the Day — ROYAL ASSENT

6.30 p.m.

Message to attend the Lords Commissioners:

The House went:—and, having returned;

Mr. SPEAKER reported the Royal Assent to:

1. Consolidated Fund (No.2) Act 1967.
2. Misrepresentation Act 1967.
3. Plant Health Act 1967.
4. General Rate Act 1967.
5. Forestry Act 1967.
6. Export Guarantees Act 1967.
7. Teachers' Superannuation Act 1967.
8. Parliamentary Commissioner Act 1967.
9. Licensing (Certificates in Suspense) (Scotland) Act 1967.
10. Post Office (Borrowing Powers) Act 1967.
11. Teachers of Nursing Act 1967.
12. Iron and Steel Act 1967.
13. Glasgow Corporation Order Confirmation Act 1967.
14. Greenock Corporation Order Confirmation Act 1967.
15. Tees Valley and Cleveland Water Act 1967.
16. Clergy Pensions (Amendment) Measure 1967.

Orders of the Day — DECIMAL CURRENCY BILL

Question again proposed, That the words proposed to be left out stand part of the Question.

6.43 p.m.

Mr. Buchanan: As a student of history, Mr. Speaker, a great respecter of tradition, and a lover of the House, I almost feel like changing my argument in favour of the traditional £. I am glad that the Government are trying to do something about the procedure we have just seen.
It is a historical fact that currency units decline with time. The purchasing power of the £ declined from 1900 to 1920, and though it rose from 1920 to 1933, none of us on this side of the House want to see that happen again in similar circumstances. The purchasing power of the £ has declined ever since 1933.
We in the United Kingdom have been used to a high value major unit. It is said to be advantageous in an economy where money transactions are large and expressed in the major unit. I do not know about that, because I have never dealt in transactions involving very large denominations of notes. I think that I speak for Mr. and Mrs. John Citizen, however, in saying that they will have an in-built psychological resistance to a 10s. unit. The fellow going for a suit which used to cost him, say, £20 will not like being charged 40 nobles, or whatever the unit would be.
My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) spoke of his experience in France, and in his remarks there was a warning against a major unit of too low a value. I confess that I always feel psychologically uplifted when I go abroad and find, or found, the £ worth thousands of francs, lire, etc. The £ has a very definite standard of value in the minds of British men and women.
I have been able to conduct my own opinion poll. Since my wife died in 1963, I have had to do a lot of my own shopping, particularly at weekends, and no one need tell me that the British man or woman will find it very difficult to master any new currency, no matter how complicated it may be. We in Scotland have a worldwide reputation for looking after our money—and I hope that the Chancellor of the Exchequer will bear


that in mind when thinking about where the Royal Mint is to go.
Anyone shopping at a supermarket will realise that we are moving into a new era of currency and purchasing power. Cheques are becoming more and more the vogue for payment of larger purchases, but in the supermarket one does not find people going round noting that coffee is 4s. 6d. and soap powder Is. lid. They just put them in the basket and go to the counter where the total is worked out by a girl with a machine—

Mr. Lubbock: Does the hon. Member really think that the old-age pensioner who goes out shopping on a very limited budget of, perhaps, £4 a week does not look closely at the price of the article she is buying?

Mr. Buchanan: I am talking about Mr. and Mrs. Average, but I am quite certain that old-age pensioners who can cope with all they meet in the supermarket, including the loss leaders, etc., will be able to cope with the new currency. I do not say that people do not bother about prices, but, by and large, our men and women will cope with a new currency, regardless of how complicated it may be.
I do not think that the £-cent system is as complicated as is alleged by the advocates of the 10s. system. I am not competent to argue the international case, but the opinion of the City, reinforced by the hon. Member for the Cities of London and Westminster in consultation with the ex-chairman of the International Monetary Fund, seems to indicate that the system we are adopting has some validity.
Advocates of the 10s. system contend that there is an association in people's minds with shillings, pence and half-crowns, but they should remember that the half-crown used to be colloquially known as the half-dollar. Is it worth as much today? We all know that it is not. That undermines the case made by my hon. Friend the Member for Stoke-on-Trent, Central, and I do not think that the new halfpenny will last much longer than 10 years.
The Government have been correct in choosing a coinage that will endure for much longer than we can see ahead. It is true that it has some disadvantages, no

one denies that, but they are far outweighed by its advantages. I wish the Government well.

Several hon. Members: rose—

Mr. Speaker: Order. This is an abbreviated debate. Many hon. Members wish to speak, but I hope that they will be brief.

6.50 p.m.

Sir John Langford-Holt: Although I am going to speak against the Government's proposal, I wish to make clear at the outset that the change which the Government are making is certainly a step in the right direction, and secondly that
If it were done when 'tis done, then 'twere well it were done quickly.
I am no advocate of delay.
We have a device in this House known as a reasoned Amendment, which means a reasoned rejection. I have always taken the view that a reasoned Amendment to a Bill is a Motion for rejection of a Bill. I shall be recording my vote later in the spirit in which the House usually considers a reasoned Amendment. The Chancellor said that he hoped that whatever our views were when the system comes in, whichever it may be—there is probably little doubt about which it will be—we would all try to work it properly. There is no doubt that we shall adopt that attitude.
Like many other movements of enlightenment, pressure for decimal currency has come not from the Treasury Bench but from the back benches. Its Parliamentary history has been too long and much too sad to record at length now. It goes back to 1841 when a Royal Commission invited the Government to consider its merits and in 1853 a Select Committee of this House recommended in favour. In 1955, much closer to the present period, a decimal currency Bill was proposed. I pay tribute to the then top sponsor, Mr. Mont Follick, who, although he was sometimes regarded as having quaint ideas, in this respect proved to be a pioneer.
In parenthesis I think it would be a good thing if someone were to return the letter opener left by Mr. Follick in the Post Office for the advantage of hon. Members. It has since disappeared. My


hon. Friend the Member for Essex, South-East (Mr. Braine) and I are the only sponsors of that Bill left in the House. That Bill died, as many do, because it was persistently and consistently opposed by the Government of the day. As usual, back benchers were ahead of the Government in their thought.
Almost the last stage of this Parliamentary saga on decimal currency was when my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) announced the formation of the committee of inquiry, the Halsbury Committee, on 19th December, 1961. We are inclined to forget that when he made the announcement he made quite clear that the Committee's duty was not to decide whether we should switch to a decimal currency system. He said that the decision had already been taken, as it is put in the Halsbury Report.
In discussion with the late Mr. Gaitskell, he said:
The right hon. Gentleman is quite right in noting that the Committee is not being asked to consider the question of 'whether' but the question of 'how'.
Later Mr. Gaitskell said:
Have the Government decided that we will have a decimal coinage unless the difficulties are overwhelming? Has a decision been taken in that sense?
The reply by my right hon. and learned Friend was:
That is so."—[OFFICIAL REPORT, 19th December, 1961; Vol. 651, c. 1135.]
There is not much new ground concerning decisions. When it carried out its delaying tactics, the Treasury was wrong then and I am afraid it is wrong today.
What must a decimal currency be? First, it must be decimal. That is not so silly as it sounds. There are arguments for other systems, but basically world currencies adopt a decimal system. It must be understandable, it must be acceptable, it must be teachable, as the hon. Member for Stoke-on-Trent, Central (Mr. Cant) said. Fifthly, it must not affect the status of the currency. Sixthly, it must have units which are large enough and small enough. The Halsbury Committee put forward somewhat similar conditions but with less conciseness and relevance than these. It said that the currency should be decimal and should maximise benefits; it should be simple, flexible, last-

ing and should not affect the standing of sterling. It should not present people with undue difficulties of adaptation in the change-over period. Seventhly, it should not result in price increases; and eighthly, it should not result in high machine and non-machine costs.
In not one of these cases has the Government proposal advantages over the 10s. unit or the £1-florin-mil system. In most cases the reverse is true. I turn to the Committee's standards and requirements. First, what is decimal? In the Oxford Dictionary it is said to be:
pertaining to or of tenths and tithes.
It is not that, so the proposal is not decimal. Dr. Sharp, who I believe sent to all hon. Members comments on behalf of the Confederation of British Industries, said:
It confuses the vulgar fraction with the decimal system.
The Halsbury Committee went on to say that it should maximise benefits. What a glimpse of the obvious! No one has suggested that any of us is trying to do anything but that. The proposals of the Government certainly do not. The second condition is that it should be simple. The vast majority of goods in this country—go as high or low as one wishes—are expressed in shillings and multiples of shillings. One never sees in a shop that the cost of something is £2 8s.; it is 48s. One never sees £1 19s. 9d. but 39s. 9d. One never sees £3 8s. 3d. but 68s. 3d. The hon. Member for Glasgow, Spring-burn (Mr. Buchanan) spoke about suits. We have never heard of the £2 10s. tailor, but of the Fifty Shilling Tailor.

Mr. Lubbock: That was a long time ago.

Sir J. Langford-Holt: It was a long time ago, but the price is still expressed in shillings. I suppose the reason is that the tailor thinks it sounds much cheaper that way.

Mr. A. Woodburn: Is it not the case that most shopkeepers mark up a price of 19s. 6d. in order not to mention the £?

Sir J. Langford-Holt: I think that is so, although I believe very few are confused by it; at least, I hope they are not. Even more shopkeepers use the price of 19s. 11d. for exactly the same reason.


It is quite easy to see that 48s. is 4·8 of the 10s. unit; 39s. 9d. is 3.9 for the 39s. and ·75 for the nine pennies. This is easy to work out. Sixty eight shillings and threepence is 6.825. I think we shall have a great deal of difficulty in working all this out under the £ system. I know which system I would find the simpler.
The next condition is that the system must be much more flexible. I do not think it could be argued that a system which has a bigger top unit and a bigger lower unit can be the more flexible of the two systems.
The fourth condition was that it should be lasting. As it has taken a Government of whatever party 100 years to take this great leap forward, this leap into the unknown—almost the last country in the world to do so—I do not think that we need worry too much about any rapid change to a new system, whichever one is adopted.
The fifth condition was that a new system should not affect the standing of sterling. I agree that nobody would suggest that the world bankers cannot multiply by two. The Chancellor of the Exchequer suggested that international traders found it a little more difficult because they were a little less sophisticated. I doubt whether there are many international traders who cannot multiply by two, either.
As to the size of the unit, I do not think that anybody would seriously suggest that the revaluation of the French franc by General de Gaulle to the extent of ten times affected the stability of the franc. What affected the stability of the franc was the stability or otherwise of the French poiltical and economic system, not the size of the franc. If it is size and size only, I do not think that anybody in the House or outside would suggest that the dollar has less merit because it is only approximately one-third of a £, or that the Swiss franc has less merit because it is only one-tenth of a £. Nobody has ever suggested that.
The Chancellor of the Exchequer said some time ago on television that we still had the old £. Since then he has shifted ground a little. The Chancellor has made some silly remarks on occasions, but I think that that remark was jostly among the leaders in the queue.
The sixth condition was that the new currency should not present people with undue difficulties of adaptation. I underline the word "people". The Chancellor told us, rightly, of the experiments which were carried out by the Halsbury Committee with the average housewives, which resulted in competency being acquired in five days and in eight days. Everybody is not an average housewife. Average housewives are pretty cute people. There are many among us who are not quite as rapid in the use of money or as sharp as that. Many people will find it much quicker and easier to calculate that 38s. 6d. is 3·85 of a 10s. unit than to calculate that it is 1·925 of whatever this new currency will become known as in the future.
The seventh condition was that it should not result in price increases. One needs to say very little about this except that, to put it at its lowest, in general prices are rounded upwards. Therefore, the bigger the unit the bigger the increase in prices which will result.

Mr. Patrick Jenkin: Does not my hon. Friend realise that in this regard both systems are exactly the same? They both have a unit of 1·2. Only at the lower end is there any question of rounding up.

Sir J. Langford-Holt: That is because my hon. Friend is introducing what I said was the vulgar fraction on to a decimal system. If the vulgar fraction is accepted, what my hon. Friend says is true. I am trying to avoid this confusion of the two systems.
Of all the main alternatives, the Government's solution has least to commend it. I should have liked to have seen the 10s. unit adopted. If it is still not possible for the Government to consider that, I should have thought that a fairly minor change on to the £-florin-mil, with comparatively little modification, could be accepted.
Cmnd. 3164 "Decimal Currency in the United Kingdom", says this in paragraph 1 on page 1:
On 1st March 1966 the Chancellor of the Exchequer announced in the House of Commons the Government's decision to adopt a decimal currency system in February 1971.
This was a decision which was not taken by the Chancellor of the Exchequer. He only took the decision as to timing.

The Financial Secretary to the Treasury (Mr. Niall MacDermot): And as to system, which the Tory Government were unable to make up their mind about.

Sir J. Langford-Holt: I quite accept that. Paragraph 2 on page 1 says this:
This is an historic decision.
The historic part of it was the decision to change to a decimal currency rather than the precise method and the date. I believe that one of the problems is that the Government have taken so many administrative decisions and actions already that they are unable to retreat from the path upon which they have embarked.
What will happen to us in the House? We know—there is no party point in it—that some hon. Members opposite are in favour of the 10s. unit and that some of my hon. Friends are in favour of the £ unit. We know, too, of the powerful persuasions of loyalty which can be imposed upon hon. Members opposite. Such power of persuasion has clearly been brought to bear upon the hon. Member for Stoke-on-Trent, Central. I have been long enough in the House to know the enormous power which that has.
I appreciate the Government's difficulties. If, even at this late stage, they could be deflected from taking what I consider to be a wrong decision—I am sure that the decision, if taken, will last for many years, probably for centuries—I should not regard that as a sign of weakness but one of strength and purpose.

7.7 p.m.

Mr. Francis Noel-Baker: The hon. Member for Shrewsbury (Sir J. Langford-Holt) speaks of powers of persuasion. I am one of those on these benches who is very disappointed that we were not allowed a free vote. I indicated that opinion on an appropriate occasion recently. I am disappointed that the majority of my hon. Friends do not feel as I do. I am sorry that we were not allowed a debate on the White Paper before the Government announced their decision. I am sure that it would have been wise to have had such a debate. Some of us are in a dilemma. We do not believe that the Chancellor's decision is the right one. We do not agree with the official Opposition spokesmen, for

reasons which I shall try to explain, about the 10s. unit. We are in a difficulty.
I hope that the brevity of my speech will not be interpreted as meaning that the proposition which I shall make is not a serious one. I hope that my right hon. Friend the Chief Secretary will not treat it as a red herring. It is an alternative proposal which has gathered a good deal of serious support among all those who will use the new currency in the future and I believe that, had the public debate gone on longer, it might very well have been shown that it had a majority of the public behind it. It provides a way out of the collision between the 10s. unit and the £ unit, the inadequacies of both of which I think have been well illustrated during the debate.
Of course I am in favour of decimalisation. If my hon. Friends study HANSARD they will see that I have been pressing for decimalisation in respect of currency and, indeed, the introduction of the metric system for weights and measures for a good many years.
The compromise solution which I want briefly to explain was referred to by both my right hon. Friend the Chancellor of the Exchequer and by the right hon. Member for Enfield, West (Mr. Iain Macleod). It is very simple. It would be relatively very economical to introduce, and it avoids almost entirely any transitional upheaval during the change. It is based on a major unit of currency worth five of the present £s sterling. Various names have been proposed for it, including the Royal and the Britannia. For the purposes of my speech I shall refer to it either as the heavy £ or the fiver, which I suspect would be the name by which it would be known, whatever its official title, if it were adopted.
The system based on it would have the following four principal advantages. First, it would be large enough to withstand many years of inflation and still retain a useful value. I think that that point is a major criticism of the 10s. unit. As my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) said, the present £ has become worth about one-quarter of what it was in 1939. The fiver would be worth about what the £ was at the end of the First World War.


At the present rate of inflation all over the world—whatever Governments are in power in different countries it will probably accelerate—the 10s. unit will perhaps be worth 2s. in 25 or 30 years and if we are to make the change there is an overwhelming argument for having a substantial value attached to the major unit at the top of the scale.
The second advantage is that under the fiver system none of the existing coins would need to be changed, except the 1d. and the shilling which would continue, would have 10 pence instead of 12. £5 and £1 notes could simply be overstamped if necessary during the transitional period, "£5 equals 100 shillings" and "£1 equals 20 shillings". The 10s. note could continue as it is and the existing coins remain in circulation. The new quarter and half shilling and new half crown could remain the same size and design as the existing 3d., 6d. and 2s. 6d. pieces. The new 1d. would become a mil, with 1,000 to the fiver. I agree that there is a case for reducing its metal content and size.
One of the supporters of the fiver solution is the former superintendent of the Royal Mint. He makes a point, with which I agree, that it would be most desirable to reduce the metal content of the 1d., probably to one-third of its present weight. It now contains almost 1d. worth of metal. He says that if this change could be made it could be paid for by the metal recovered from reducing the size of the 1d.
The third advantage of the heavy £-cent-mil system would be that the new currency would provide a satisfactory top and bottom unit. The fiver would be large enough to be very convenient for banking purposes and the 1d. small enough for the housewife or shopper who wants to buy a small item or travel on public transport. If the ½d still has a use after the transitional period, which I think is very arguable, it could be retained at a value of 20 to the shilling as a temporary measure.
The fourth advantage, which is important, is that the process of decimalisation would be extremely simple for the individual human user of money and would involve no change in existing slot machines and very little change in cash registers and other business machines. In effect, the first two digits after the decimal point would be the shillings, and the

third digit would be the pence. If there were a ½d., it would be the fourth digit. One would be able to convert simply. For example, 19s. 9d. becomes 0·199; 13s. 4d., 0·134; and 7s. 9½d., 0·795. It would be so simple that there would be no problem for anyone to understand the transition.
I could make a longer and more detailed speech about the advantages of the fiver, but they are points that are probably better made in Committee. I believe that it would be a sensible compromise. As I said earlier, had the public debate been allowed to continue it is a solution that would have attracted increasing support. It is a good combination of a necessary modern reform with as much of our national tradition and individuality as it is sensible to retain, and it would protect the prestige of the £. I very much hope that my right hon. Friend will deal with these points.

7.15 p.m.

Mr. Eric Lubbock: On the system of which the hon. Member for Swindon (Mr. Francis Noel-Baker) has just spoken, I would only say that, whatever the merits of the many alternative systems, they were investigated in some detail by the Halsbury Committee. In practice, the argument has now narrowed to a choice between the £-cent-½ system proposed by the Government and the 10s.-cent system supported by the vast majority of those who oppose the Government. I should like to concentrate on that controversy and begin by taking up one or two points made by the Chancellor of the Exchequer.
In arguing, he always sounds like an extreme Conservative. I sometimes wonder whether I am back in the pre-1964 period when I listen to him speaking about the well-known £, known throughout the world, and its great prestige. He should have had a Union Jack on the Dispatch Box while he was speaking. I was reminded of the last phrase of the poem that Christopher Logue wrote at the last General Election, when he said:
I shall vote Labour because deep in my heart I am a Conservative.
I think that the Chancellor is a person to whom that description should be applied.
The Chancellor says that the disadvantage of the 10s. system is that one would


change the major unit for record-keeping purposes. That, too, is a very good Conservative argument. If we take the National Income and Expenditure Blue Book, in which a series of figures is given for ten years, what could be easier when the next annual edition is produced than for somebody to go through all the figures and multiply them by two? Is that such a difficult exercise that the Chancellor can say that it will disrupt our whole economic life?

Mr. Woodburn: Does not the hon. Member agree that when this country is trading with countries all over the world, which have been trading in £s for 100 years, it is a great handicap to the continuance of trade when they must start wondering what are the comparative prices of machinery which they order in this country and calculate them in a different unit? Continuity is very important in international affairs.

Mr. Lubbock: It has already been pointed out to the right hon. Gentleman—I do not know whether he was listening—that the French had no difficulty when they altered the value of their franc. I suggest that the right hon. Gentleman looks at the export performance of France and ourselves over the past few years and sees which is better. One of the reasons why we have chosen a long preparatory period is to enable people who must use the new currency to be adequately educated and prepared. That applies just as much to the foreign traders using sterling as the basis of their transactions. Traders and bankers all over the world will have practically no difficulty in understanding a change in the major units.
I do not believe that the international arguments are of the slightest importance. I agree with the Chancellor that they cannot be dismissed, and that means that they should have been considered by the Halsbury Committee. But they were not, apart from the evidence given by the Bank of England, and, as I think the right hon. Member for Enfield, West (Mr. lain Macleod) showed, there was no attempt to test the validity of that evidence. I agree that the Committee is to be strongly criticised for not calling in foreign bankers to see whether the assertions made by the Bank of England were true.
I have some claim to speak on the subject, because I have always been a passionate advocate of decimal currency. I put that in my 1962 election address much to the disturbance of my agent, who said that it was not an issue of any importance. But I knew that sooner or later it had to become an issue of importance. I therefore welcome at least the decision to go over to decimal currency in 1971. I also welcome the Government's decision to set up a Decimal Currency Board to facilitate the conversion. That idea was included in a Bill which I and my hon. Friend the Member for Bodmin (Mr. Bessell) presented to the House nearly two years ago. This, like the other Bill mentioned by the hon. Member for Shrewsbury (Sir J. Langford-Holt), never made progress because it was consistently vetoed Friday after Friday by Government Whips.
I want to make one or two new arguments which have not so far been mentioned in the debate as to why the 10s.-cent system is to be preferred. I dispute the Chancellor of the Exchequer's contention that there is no difference in the costs between the two systems as regards minting of coins, the conversion of machinery or the use of accounting and business machines generally. On 9th March, I asked the right hon. Gentleman if he could give me some estimate of the cost of minting alone. In a Written Reply, he said:
No firm estimate has been made of the minting costs of any 10s. system, but the difference would not be significant."—[OFFICIAL REPORT, 9th March, 1967; Vol. 742, c. 340.]
I wrote back to the right hon. Gentleman saying that surely he must have made some estimate or calculation in his mind of what the difference would be. He very courteously wrote back saying that, upon the calculations that he could give, the difference in minting costs would be about £3 million. I am convinced that the difference would be much larger than that. The right hon. Gentleman's letter shows how little he has considered the matter, because he says:
… if a 10s. system were introduced the 1 and 2 cent coins would be identical with the 1 and 2 new penny coins.
He forgets that, in the £-cent system, the lower tier of the coinage has to have three coins in it and not two—a half and a one and a two. That is why I intervened in his speech today and asked whether


the number of these coins it was proposed to mint was still as given in the Appendix to the Halsbury Report. He replied that to the best of his knowledge this was so, and I want to give some interesting calculations on this point.
The two new penny piece, valued at 4·80d.—1,500 million of them are to be minted for the Halsbury scheme—can be entirely eliminated under the 10s.-cent system because the one and two cent pieces under that system would be the only bronze coins one would need at the lower end and then one would go on to cupronickel. The weight of new bronze coins is in proportion to value, and if we take the cost of minting as being directly proportional to the weight—a legitimate assumption because labour cost is quite small in comparison with the whole—we can work out the cost of the two new penny piece as being no less than £6·1 million, according to the Report in paragraph 253. But since the total minting costs have increased since then from £22·5 million to £30·75 million—as stated in the Explanatory and Financial Memorandum—I have increased this estimate in the same ratio and make the cost of minting two new penny pieces alone as £8·3 million.
The other major difference lies in the retention of the half crown. Here I admit that the saving is more difficult to calculate because Halsbury recommended a 20 new penny coin which does not appear in the White Paper. Since, however, there are in circulation about 450 million half crowns, worth over £50 million, their scrapping and replacement by an equivalent volume of some combination of the 10 and 50 new penny coins, can hardly cost less than the figure I have given for the minting of two new penny pieces.
Apart from minting costs, there is a substantial additional element in the Halsbury proposals arising from the conversion of coin-operated machines—gas, electricity and parking meters, ticket vending machines, particularly on the underground, public telephone boxes and vending machines. It is obvious that, in all these applications, the 6d. is of paramount importance and since the Government will only pay compensation in the most exceptional cases the consumer will have to foot the Bill.
The motorist who parks in London will have to pay for the conversion of the parking meters. The electricity consumer will have to pay for the conversion of the electricity meters through his bill. In the case of vending machines alone—machines in which commodities like cigarettes, sweets, beverages and snacks are sold—the cost of dropping the 6d. and half-crown is estimated to be about £13·2 million in the memorandum submitted by the Automatic Vending Machine Association to the Chancellor on 2nd November. With these few items, the total additional cost of the Chancellor's system is £29·8 million.
The Chancellor says that under his scheme the cost of converting business machines, cash registers, adding machines and accounting machines is lower because the 10s.-cent system
… makes less efficient use of machine capacity.
He says this in paragraph 15 of the White Paper. This is only true to the extent that businesses ignore the half unit. If they need an extra column to record it, as they will do in the case of cash registers for retail shops, for example, the capacity of machines will only be one-fifth of what it could be under the 10s.-cent system. There is also the cost to the country of having to continue manufacturing non-standard machines recording the half unit which will not be used anywhere else in the world.
I now turn to the arguments about associability and the half unit, which, as the right hon. Gentleman said, are at the core of the difference between us on this issue. I agree with the right hon. Member for Enfield, West that Lord Halsbury has taken a very unusual step in circulating the contents of his speeches to private meetings of parties. I think that it is unusual and I suggest irregular that the Chairman of a Committee appointed by the Government should write round to all hon. Members purporting to reinforce the conclusions of that Committee, but in fact, as I shall show, contradicting many of the most important findings of his own Committee. He has been worsted in public argument and must have been viewing with some alarm the prospect of his scheme being defeated, which it would have been had it not been for the undemocratic decision by the Government to impose the Whips.


Despite the views, of the hon. Member for Stoke-on-Trent, Central (Mr. Cant), whom we all respect and know to be well informed, I hope that many hon. Members opposite will disregard the Whips on this issue, which is not a party political matter. Hon. Members should be free to make up their own minds on the basis of the expert advice they have been given and their consultations with their constituents.
To get back to the curious pamhplet published by Lord Halsbury, I want to quote a passage from it and compare that passage with a quotation on the same subject from the Report. In the pamphlet, Lord Halsbury says:
It seems impossible to accord to associability the importance that is currently attributed to it. … Associability should be eliminated as a policy determinant from the arguments respecting the relative merits of the £ and 10s. systems of decimalising our currency.
I am glad that the Chancellor does not go as far as that and agrees that associability is at least a factor to be taken into account, even though he does not attach to it the importance that some of us do. The Halsbury Report said in Chapter VI:
… it would be wrong to disregard the worry and distress which a change of currency could involve, particularly for some old people or harassed housewives.
Later, also in Chapter VI, it said:
The pure 10s.-cent system must be regarded as the best, both from the point of view of the immediate change, and, though less obviously, during the remainder of the transitional period and beyond",
I know that the Chancellor says that this is only a short-term operation and that people will get equally used to both systems after a period, but again I am sure that he is incorrect on that. The Report continues:
This advantage, multiplied many times in a multitude of transactions of every description day by day, is not a factor which can be ignored in selecting the right decimal system.
That is a direct contradiction of what Lord Halsbury has said in the pamphlet he circulated to all hon. Members.
The next thing I thought rather curious was that Lord Halsbury pointed out that millions of tourists go abroad every year and find no difficulty in shopping in foreign currency. The Chancellor repeated that argument. But people who go abroad do find difficulty in shopping

in foreign currency and this is one of the reasons for the popularity of package tours, in which the tourist pays for his air passage, hotel bill and various other things in advance in sterling before he starts on his journey. He then does not have the bother of having to make calculations in different money.
In any case, the person who can afford to go abroad on holiday is not the sort of person who is most likely to find the transition hard. It is the elderly and the poor housewife who can never afford a holiday, let alone a holiday abroad, who will suffer. It appears that Lord Halsbury lives in a sort of upper class fantasy world, to judge from this pamphlet, in which everyone goes to New York for holidays, has a joint on Sunday, does not look at prices when choosing goods in the supermarket and is constantly buying new hats. Let us try to think for a few moments of the 70-year-old pensioner, or of a mother with five children trying to live on unemployment benefit. To these people anything which makes shopping more difficult will cause misery and hardship.
The evidence given by Dr. Sheila Jones in this respect and her letter to the newspapers this morning have already been mentioned. I remind the Chancellor of the Exchequer that in her evidence Dr. Sheila Jones spoke not about three or five days, but about two or three months for the average housewife to achieve her present £ s. d. standard of performance with the £-cent-half system.
She has recently told me that this estimate is very conservative for a number of reasons. One is that however realistically actual shopping transactions are imitated, the situation in practice would not approach the relatively ideal conditions of the experiment and that the housewife's attention in the experiment was not distracted by extraneous conditions. Another is that the housewives received individual training each day in recognising the value of present coins in terms of their decimal value. In addition, all mistakes were rectified and explained at leisure by the experimenter and intensive practice under skilled guidance of the kind given in the experiment was probably more conducive to the acquisition of a new skill than would be the case with haphazard practice.
I have discussed this with Dr. Sheila Jones and asked whether it is possible to say how long it would take to acquire the £ s. d. performance under average shopping conditions. She said that on the basis of the experiment it was not possible to make that estimate, but that there was no doubt in her mind that the two or three-months' period mentioned in the Halsbury Report was very conservative.
We shall also consider the evidence of Mr. Broadbent, the Director of the M.R.C. unit in Cambridge, evidence which has not been mentioned by the Chancellor of the Exchequer. He concluded that calculations involving fractions were significantly harder to perform than calculations which did not involve fractions. The Halsbury Report said that his conclusion supported the commonsense view that the 10s.-cent system was to be regarded as distinctly the easiest from the point of view of paying sums, one including a ½ and the other not.
It must be stressed that this would be a permanent difference which would not disappear in two or three months. There are plenty of quotations from the Halsbury Report to prove that it is the fraction which causes the difficulty, and there is no fraction in a true system of decimal currency. Paragraph 46 says:
Logically, of course, decimal and vulgar fractions are generally incompatible and there is no place whatever for vulgar fractions in a decimal currency.
Paragraph 224 says:
But we take note that, under a £-cent-½ system, reintroduction of fractions in many fare scales"—
the Report is here discussing transport—
coupled with the increased incidence of fractions in change-giving, must add to conductors' difficulties and decrease their efficiency.
This will be not just for one month, but permanently, for as long as bus conductors have to handle the half unit.
The half unit will not disappear for quite a while. I notice that on 21st December the Chief Secretary was very careful not to say what he meant by "eventually", but I put it to the House that the half unit will not disappear for a very long time and that these difficulties will be with us for perhaps 150 years.
Let me explain how I work this out. I start with the evidence given to the

Halsbury Committee by the Ministry of Agriculture, Fisheries and Food which suggested that at the present rate of decline both in its use and the value of money it might be 20 years before the ½d. became as obsolete as the ¼d. was in 1952, eight years before its demonetisation. That means that if we were not to convert to decimal currency, we should be thinking about demonetising the ½d. in about 1983.
In the debate in another place, Lord Halsbury said that the rate of inflation was at a factor of about two per century. Therefore, if we were not thinking of converting to decimal currency, we would be considering demonetising the penny in about 120 years from now, or about 2087. The smallest unit in the Government's suggested system is 1·2d. and, on the calculations which I have given to the House, it is reasonable to say that the half unit would last until the beginning of the 22nd century A.D.
Who can tell what changes may have taken place in coin handling and money recording by that date? Coins and bank notes may no longer be in use and everyone may have a Barclaycard, or its equivalent. The last thing we need in a period of rapid and accelerating technological change is a system designed to last for a thousand years.
I also dispute the Chancellor's contention that with increasing prosperity coins of the smallest value become less important. I believe quite the reverse. Lord Halsbury says that the 1d. of today has 20 per cent. greater purchasing power than a ¼d. of 1900.
Nobody suggests that a ½d. equivalent is unnecessary in any decimal system. Indeed, the Chief Secretary went to some pains on 21st December to explain that when he said "eventually" and when the word was used in the White Paper, it did not mean "in the next few years". But the Government cannot have it both ways. If the Government say that the ½ new penny will disappear quite soon because of the great inconvenience of fractions in any system of decimal currency—with which I agree—if in fact it disappears before the coin has become obsolete through changes in the value of money, then the effect is bound to be inflationary.
I know that it has been said that there is no relatively inflationary tendency in


this system which does not also exist with the 10s. system, because the smallest units are the same in both cases. However, I dispute that, because there will always be a tendency to round up to the nearest whole number of units.
For instance, the price of the Sunday Express, which is now 6d. would be 5 new pennies on the 10s. cent system—it converts very nicely—but under the £-cent-system there is no exact equivalent and it is very likely that the price would be increased to 7·2 pence. The cigarettes which I smoke—Players No. 6—now cost 3s. 6d. and would cost 35 new pennies under the 10s. cent system, but 17½ new pence under the £-cent-system and the cigarette manufacturers would want to avoid the use of half units which would be extremely inconvenient in the giving of change in shops and even more inconvenient for use with the machines.
I do not know whether the Financial Secretary saw the item in The Times the other day under the heading
Decimals could put S.T.D. up to 1s.
It was written by Mr. Pearce Wright, the science reporter, and he said:
With the introduction of decimal coinage, the minimum charge for using a public telephone S.T.D. kiosk could go up to a shilling. Even the Post Office recognises that such an increase would meet with public outcry, but its engineers face big problems in maintaining the present charges under a decimal system.
There would be no 6d. equivalent and that slot in the coin box would have to be blanked off and the minimum charge would be 1s.

Mr. Speaker: I do not want to appear discourteous, but I remind the hon. Gentleman that I have appealed for reasonably brief speeches. This is a short debate and many hon. Members want to speak.

Mr. Lubbock: I apologise if I got carried away.
I believe that the Chancellor of the Exchequer has made a serious error by not taking the views of the public into account in this matter. The Consumer Council survey has already been mentioned. It says that nearly two-thirds of the people who were aware of the advantages and disadvantages of the two main systems were in favour of the 10s. system.
I should like to refer the Financial Secretary to the correspondence which I have been receiving from members of the public, not only from my own consituents, but from people who have seen me discussing the matter with Lord Halsbury on television, people who have read my articles in the newspapers.
Of these letters, 66 have favoured the 10s. system and only five the £ system. I have had five letters favouring the £-mil, 11 some other system, and four in favour of no change. From this evidence I think that the overwhelming majority of the public is in favour of the 10s. system. I do not know whether the Chancellor or the Financial Secretary talks to members of the public and whether they have discussed this matter with bus conductors, shop assistants, housewives, the old folk and the people in the local. If they do they will get the same answer from them and it is that they want the 10s. system.
The Government are making a hideous mistake, and it has been detected by the common sense of the British people. The Chancellor has listened to his friends in the National Cash Register, in the Bank of England and in the City of London, from whom we have heard this evening. He has been mesmerised by the power of the great financial authorities and he has ignored the woman in the street.
The public is overwhelmingly against him and if there was a free vote this evening this House would be overwhelmingly against him. He will have his memorial, as the right hon. Gentleman the Member for Enfield, West predicted. When many of the issues in this Parliament have been forgotten for a long time he will be remembered as "Half Cent Callaghan" the man who did not dare trust his judgment, and put it to the test of the House of Commons.

7.42 p.m.

Mr. A. H. Macdonald: May I begin by referring to an argument advanced by the right hon. Member for Enfield, West (Mr. Iain Macleod). He said that as far as the actual coins were concerned, he thought that the 10s. system had the advantage. I recognise that from his point of view this was only a marginal advantage, and that his main argument for and against lay elsewhere. If I may say so, he was in error


here. I choose my words carefully, I am not suggesting that, in my opinion, he was making a mistake in judgment. He is in error, and the coinage in the 10s. system is twice as bad—this is something that could be quantified—as in the Government's proposals.
It is important to draw a distinction between the unit of account and the token of exchange. When I speak about coinage I am speaking about the token of exchange. Under the 10s. system, as presented by its advocates, if there shall be a rise in the value of prices, and whether this takes a long time or a short time is irrelevant, the smallest unit in the fullness of time will become superfluous, but under that system it cannot be discarded because it is necessary for the giving of change.
Therefore, under that system, it is necessary to continue in existence a coin that is no longer required. This is not an economic method of proceedings, and is an argument to be weighed against those recently advanced by the hon. Member for Orpington (Mr. Lubbock) when he was adding up the cost of the various types of coinage. I say that this matter can be quantified precisely, because the same phenomenon appears in the coinage system proposed by the Government, but at one stage further on. Under that system, when the time comes when the smallest unit is no longer necessary it can be discarded without any adverse effects in the way of giving change.

Mr. Ginsburg: Is it not a fact that 40 per cent. of transactions will include this lowest denomination and that, therefore, if this coin were to disappear we would be in some difficulty?

Mr. Macdonald: I have no doubt the fault is mine for not making my argument clear. It is probably true at present that a large number of transactions, I cannot tell if it would be 40 per cent., but a large number of them, would involve the lowest unit. I am looking ahead to the time when the increase in prosperity or inflation, or perhaps both, has brought about the situation, where the lowest unit, on either system, is not of a size sufficient to purchase anything. Then it should be discarded. I am suggesting that under the 10s. system it cannot be discarded, because it is required for the giving of change. Under

that system we shall be forced to continue with a coin which is serving no useful purpose for purchases.
I turn now to an argument advanced by my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) who referred to the capacity of accounting machines. Again this was an argument advanced by the hon. Member for Orpington. I can understand all of the other arguments in favour of the 10s. system, although I do not agree with many of them. But I do not understand the argument about machine capacity in favour of the 10s. system. It seems to be manifestly clear, simply by looking at a cash register or accounting machine, that the capacity will be halved by the introduction of a 10s. system. It will not be multiplied by five, it will be halved, and this can be demonstrated simply by inspection of the columns produced by the standard accounting machine.
This is not the first time that this House has discussed a question of a change in coinage. I have been doing a little historical research on this subject and I find that as far back as 1695 there was a discussion about the proposed change of coinage. That was when the silver coins were made of silver but had smooth edges and people were clipping away at the edges. It was decided to replace them by milled coinage. I looked up the debates of that time, and they make particularly interesting reading. There was a discussion first of all on whether to introduce the new coinage and secondly, once that decision had been taken, whether to retain the existing units. I quote from the Parliamentary History of this period:
The next step was to consider whether the several Denominations of the new Money should be the same weight … as the old … The Court Party—
I take this to be the term used to describe the Government—
… were for preserving the old standard …
They said:
… in respect of our foreign commerce there was no reason to alter our standard. That at home great confusions would attend it.
After a long debate the report goes on:
After debate, the commons resolved …
to continue:
… according to the established standard … at last this great undertaking of the greatest difficulty, yet of absolute necessity, was


happily accomplished, to the immemorial honour of the parliament in general, and in particular
of the Chancellor of the Exchequer.

Mr. Bob Brown (Newcastle-upon-Tyne, West): Can my hon. Friend inform us if the House had the privilege of a free vote on this occasion?

Mr. Macdonald: The record is silent on that point. It states that the decision taken was a distinct and brilliant success. We have, therefore, a happy precedent in changing our coinage, but in maintaining the existing unit, and I hope that this is a precedent which we shall follow.
I have a particular interest in taking part in this debate, because I am a member of the National Union of Bank Employees, I think the only member in this House. It will be agreed that everyone will be affected to a greater or lesser extent by this proposed change, but that members of the banking profession will be affected more than anyone else. While everyone handles money, and carries out transactions from time to time, members of my union are handling money all the time.
I understand that my union is a strong supporter of the Government in this matter, and warmly endorses the proposal to introduce a £-cent-½ system. Naturally, this is an argument which weighs very heavily with me, but I should like to think that it may be significant to other hon. Members when they realise that the professional body most closely concerned in this matter endorses the Government's proposal.
While I am on this topic, I wonder whether this is the place to put in the Government's mind the suggestion that they may find it well worth while to co-opt on the Decimal Currency Board a member of the National Union of Bank Employees. My reason for saying that is that when the transitional period is entered upon, no matter what system we choose, there is bound to be a certain amount of confusion and difficulty. People will have problems, and they will turn to the banks for advice. It is my members behind the bank counters who will have to give advice to the people who ask for it.

Mr. Edwin Brooks: Would my hon. Friend explain how this advice

will be given when the banks do not propose to employ the new half unit?

Mr. Macdonald: It is perfectly simple to give advice, because, although the banks will not be employing the half unit, they will naturally be dealing with customers—private, retail and wholesale—who will be employing the half unit. They will be seeing their books of account and registers in the course of banking transactions and they will have to be familiar with the operation of the new system, whatever it may be. Retailers and wholesalers will have their difficulties in the transitional period, and the natural person for them to consult for advice is their banker. There are serious arguments for the suggestion that a member of the National Union of Bank Employees, which is most deeply involved in this matter, should be co-opted on to the Decimal Currency Board.
I turn to one of the arguments which is most commonly advanced in favour of the 10s. system, and that is associability. It has seemed to me for some time that associability is one of the main arguments against it. I have noted that the examples quoted by those who advocate the 10s. system are most highly selective. I have often seen the suggestion that under the 10s. system 63 cents will be roughly equivalent to 6s. 3d., and that it will be easy and natural for the housewife to make the transition. That example is just and accurate: 63 cents are roughly equivalent to 6s. 3d.
But if we go further up the scale to 68 cents, is it unreasonable to suppose that a large number of housewives, knowing that 63 cents equal 6s. 3d., will conclude that 68 cents equal 6s. 8d.? Of course, it does not: it equals 6s. 10d. I know that at that level 2d. is not a large amount. But the same situation obtains at lower levels. We can see that 13 cents equals 1s. 3d. There will be a great tendency on the part of the housewife to conclude that 18 cents equals 1s. 8d. It does not: it equals 1s. 10d.— a difference of 2d. It is even possible that a number of housewives will conclude, on the analogy of 18d., that 18 cents equal 1s. 6d. This is a difference of 4d.—20 per cent. This is a large sum in a small amount.
The 10s. system, so much vaunted for its alleged associability, contains a built-in


tendency to mislead housewives and towards concealed price increases by retailers and other organisations. I cannot understand why this system is advocated as the one from which housewives will most benefit. It seems to me manifest that it is the system from which they are likely to benefit least of all.
I know only one serious argument advanced in favour of the 10s. system. It is an undoubted fact that if the £-cent-½ system is adopted accounting machines will not be standard machines and therefore will not be readily exportable. This argument was brought to my attention by a constituent. I am obliged to him. It is an argument against the Government's proposal, but I do not think that alone it is sufficient to stand up against the weighty arguments in favour of the £ system advanced by the Chancellor of the Exchequer today.
There has been a great deal of confusion in the minds of those who oppose this system between the unit of account and the token of account. What the hon. Member for Orpington said about bus conductors was beside the point. Bus conductors will not be affected by the name of the tokens used. Whether the smallest token is called a cent or a half cent will make no difference to the operation of taking in money and giving change. They will recognise the token. In the same way, members of the public will recognise the tokens quite readily and will not be confused by the names which may be given. The picture which is conjured up of agitated members of the public crowding round bus conductors, news vendors or public conveniences nervously fumbling with their coins to get the right one is quite unrealistic. People will readily and easily learn to recognise the coins required.
The advantages given by a heavy unit—which are so great that because we are accustomed to them I sometimes wonder whether we fully appreciate them—would be minimised by converting to a 10s. system. If the Government's system is adopted, we shall have a lasting system which will not detract from our international trade. I agree with those who say that the international argument is not strong, but it exists. Any change from the established £ cannot benefit our international relations and the activities of sterling, although I do not think that

it would greatly weaken it. All the arguments seem to me to add up to a weighty, cogent and convincing case in favour of the £-cent-half system, and I shall have no hesitation in supporting the Government.

7.58 p.m.

Mr. Terence L. Higgins: I listened to the arguments of the hon. Member for Chislehurst (Mr. Macdonald) with great interest. I hope that he will excuse me if I do not take them up except in passing, because other Members wish to speak and I want to be as brief as possible.
I am very sad that the House will not have the opportunity of voting on this issue on its merits. I found the argument of the Chancellor of the Exchequer, that it was no longer practical politics to argue further about the matter, very unconvincing. There is no reason why we should not take a decision different from his at this point. The delay which would be involved in drafting another Bill would be very small. Certainly I do not think that we can accept the right hon. Gentleman's argument that further delay would jeopardise the timetable which has been agreed. It was very much in his hands to avoid this situation arising. There is no reason why he should not have brought this matter before the House earlier so that we could have taken a reasonable decision.
The Chancellor made great play of the fact that the majority of the Halsbury Committee—admittedly only 4 to 2—was in his favour. But he disregarded the fact that nearly all the other organisations in this country are against him. There is certainly not a majority of the organisations representing all interests in this country in favour of the Government's system. As has been rightly pointed out, the right hon. Gentleman is not prepared to risk discovering whether the majority of the House supports the Government's proposals.
The Chancellor rightly said we should consider how much weight we should give to the various arguments which are adduced for and against the different systems. I wish to refer to them in particular relation to the question of timing. If one thing is clear, it is that the advantages and disadvantages of the £ system and the advantages and disadvantages of


the 10s. or any other system arise differently through time. Some systems have an immediate advantage whereas others have a delayed advantage. This is an important point to consider because while we may be legislating for 1,000 years, we should not give the same weight to an advantage which will happen immediately the system is adopted as we should give to an advantage which may not benefit the country until 2967 A.D.
I wish first to speak briefly about the so-called international case. I am not at all convinced by the idea that international bankers are so naive that merely changing the unit will shake confidence in our national currency. I am sure that international bankers and, indeed, those with whom we do business, are far more sophisticated than that. At all events, even if there is a slight point here which should be borne in mind, it is a once-for-all change and while it is immediate it does not repeat itself throughout time.
I am much more convinced by the international argument which has been put forward that we should have a 10s. unit—I come down on that side of the fence—because it would enable us to have a system which is comparable with the systems of other countries and not a system which is the only one which is not a pure decimal system. I do not feel that much weight should be given to the argument for the heavy £-cent-½ unit, and still less to the argument for the even larger unit which has been advocated from the benches opposite. The time over which inflation and the rise in the standard of living will reduce the importance of whatever maximum unit we have is likely to be considerable. This—the argument for a heavy unit—is a deferred advantage and not one to which we should give great weight when comparing it with the immediate advantages of the 10s. system.
A point which has not been adequately considered is that the £ system is not a pure decimal system but has a vulgar fraction added on at the end. This means that our business machines will be related to the impure system. This will mean that we have to produce different business machines if we export. This difference is likely to perpetuate itself. Eventually, when the half unit falls off

the end of the £1 system with the increase in inflation and the rise in the standard of living, we shall find that many of our business machines have to be converted yet again. This is a further point which tells against the £ system and in favour of the 10s. system.
The main advantage of the 10s. system arises from the question of associability. This is an immediate and transitional advantage which should be evaluated highly on account of the fact that it is immediate. Similarly, the point was made by the hon. Member for Orpington (Mr. Lubbock) that on telephone slot machines the figure will not be cut down to about 4½d. or its equivalent under the £ system but rather is likely to be raised to 1s. This is again likely to be an immediate disadvantage of the £ system.
The more one looks at the whole question, the more one finds that the advantages of the 10s. system are immediate and the advantages of the £ system may be deferred for several generations. I cannot accept the Chancellor's argument, which he described as a powerful one, that some of the transitional difficulties may be overcome in weeks rather than months, because what I have said about business machines continuing to operate on a mixed decimal and fraction system will continue for many years ahead. The same would be true of teaching arrangements on the mixed system. If one reads carefully the Halsbury Report, one sees that it is clear that the balance of advantage of the 10s. system is likely to last for a generation or even longer. These are, therefore, the arguments to which we should give considerable weight.
I turn from the question of timing to consider briefly the costs of conversion and the control which the Government will have during the transitional period. This falls very much under the Clauses of the Bill dealing with the Decimal Currency Board. Clearly, if the cost of conversion is to fall effectively on the users of the machines, the timing of the operation will turn very much on bilateral negotiations between producers and users of the equipment. If, however, the Government are to make no contribution to this cost or do not make investment allowances available on certain of these business machines, the Board will have great difficulty in controlling the timing of the conversion. That, I gather,


is in contrast with the situation which has existed in other countries—for example, Australia—during the transitional period.
There are some considerable technical points which the House should bear in mind. We are to try to carry out what has rightly been described as the largest currency conversion ever, from the present system to a decimal system. This will mean an enormous increase in the production and conversion of business machines. Are we satisfied that the capacity of the industry will be adequate? More particularly, does not a grave problem arise because we will be asking the industry to expand its capacity rapidly, it will have to do so for about three or four years and then it must cut down rapidly? What provisions do the Government propose to make, presumably under the present Bill rather than under the later one which will follow, for encouraging investment in the business-machine industry in general and the computer industry so as to encourage them to invest sufficiently in plant producing the business machinery during the interim period?
If those industries are to have sufficient incentive, their overall profits must be sufficient to provide an adequate payoff merely during the conversion period, except for the additional machinery which may reasonably be expected to be needed after that period to cope with the ordinary growth in the use of business machines. This raises problems concerning both investment in business machine producing equipment, the training of new staff and then subsequent redundancy.
When making its decision this evening about whether to support the Government's £ system or whether it would rather support a 10s. system, the £-mil system or any of the other systems which have been proposed, the House is entitled to know what would be the cost, at this stage, of changing our minds from the system to which the Government have prematurely committed us and opting instead for the 10s. system.
Clearly, in the light of the Chancellor's statements, a number of people may have taken investment decisions. If we were to change our minds at this stage, clearly such people would incur a loss. Can the Chief Secretary give us any idea

of what that cost is likely to be? If it is nil, is there any reason why we should not change our minds at this stage either on these grounds or because the Royal Mint has made its arrangements in anticipation of the transitional period?

The Chief Secretary to the Treasury (Mr. John Diamond): I shall be able to answer the hon. Member's second question a lot more easily than his first.

Mr. Higgins: I shall look forward to hearing the right hon. Gentleman's answer on both points. What would be the cost to private firms or the Government of our changing our minds at this stage? Would it be £10 million, or more or less? This is something which the House needs to take into account in making its decision tonight. Overall the arguments are somewhat finely balanced, but I come down very much in favour of the 10s. unit.

8.10 p.m.

Mr. W. T. Williams: The Chancellor will have carried the whole House with him in bringing before it this determination to change from our present system to that of decimal currency, but it would appear, from the course of the debate, that he carries the House in little else.
Like other hon. Members who have spoken in the debate, I think it is a great pity that the Second Reading of the Bill takes place without any prior opportunity having been given to discuss the merits of the different systems. That may have helped the Chancellor in coming to the conclusion to which he is so firmly holding, more particularly in the light of the position that was reached by Halsbury, the consequences of that decision, and the effect of that decision as soon as it was known.
The position, undoubtedly, is that the Halsbury Committee was greatly affected by the argument regarding the international status of sterling. That emerges quite plainly in paragraph 373 of the Halsbury Report. Indeed, one of its members, I think it was Dame Anne Godwin, after the Report was published and the Chancellor had himself declared that the argument in relation to the international status of sterling did not overwhelmingly impress him, said that if she had not been so persuaded about the international consequences of the change in the basic


unit she might herself have voted in favour of the domestic advantages of the 10s. system. Certainly if that were so it would have meant that Halsbury would have been equally divided. The right hon. Gentleman the Member for Enfield, West (Mr. kin Macleod) went further than that. The right hon. Gentleman said he thought that, except for the overwhelming pressure on the minds of the Committee about the international status, the majority would have been heavily in favour of the 10 cent unit system.
Since the Halsbury Committee reported, the Chancellor has been given a good deal of information, and a good many representations have been made both to him and his predecessors over the years regarding the £-cent system to which the Halsbury Committee had committed itself.
It is therefore a pity that the Chancellor, knowing that the principal national distributive trade associations were strongly in favour of the other system in the light of the reservations that ultimately emerged from members of the Halsbury Committee and of the tremendously growing and massive support for the 10s. system which followed the publication of the White Paper, did not afford the House an opportunity of presenting its views. The Chancellor is obliged, without the opportunity of hearing what hon. Members have to say, to come to the position where today, when we are discussing this important matter, the debate is almost like a discussion between deaf people.
The position is that the Chancellor has made up his mind. All the arguments that have been advanced in this debate will substantially be dismissed, as the very powerful arguments which the Chancellor has already heard have already been dismissed by him as that of a pressure group of people having a vested interest and not really worthy of his consideration.
I take the view that the Chancellor has begun on a false premise and so has come to a false conclusion. Shakespeare, I think, got Malvolio, from the logic-chopping of a clown, to agree that his grandam was, in fact, a wild fowl. The Chancellor has not gone to that length, it is true, but apparently he took up his position initially because he was per-

suaded that Halsbury was right. Halsbury took up this position initially on the ground that the international argument for the £-half cent system was essential for international purposes. The Chancellor has changed his mind on that issue at least once, but he appears today to have gone back substantially to the position which he held initially. He now says that he is not impressed by the argument about the £ from the point of view of principle, but that it does seem to have some merit from the point of view of convenience.
I do not want to repeat the arguments which have already been used concerning the advantage and the simplicity of the 10s.-cent system. But if the argument regarding the international status of sterling falls down—and I want to say a word about that in a moment, because I think that it does—there is a tremendous lot to be said in favour of a system which has the merits of simplicity, ease and convenience from the point of view of the ordinary person.
After all, the real purpose of our coinage system is that people shall be able to use it simply, that they shall be able to understand it, that they shall not find it complicated, and that they shall not be faced wih unnecessary difficulties. With regard to the great mass of people, even if it is only on balance, on balance the advantage clearly lies with the 10s. system. Its associability is obviously greater.
I cannot for the life of me see any merit in the argument that because of some doubtful advantage internationally the argument must be taken to the point that our own people shall be faced with difficulties and with problems that are unnecessary. Over 95 per cent. of all day-to-day transactions involve only shillings and pence. The transition under the 10s. system is obviously very much easier. The coins that the Government will have to introduce will be unfamiliar. The tendency to inflation will be greater. With a basic coin of 2·4d. we have to introduce a fraction in order to reduce it in the hope that we will quickly, be able to dispense with the lowest coin. These are obvious disadvantages. Indeed, the existence of a fractional unit is in itself a serious disadvantage. It unnecessarily complicates the system—the


more so because of the fact that the banks will themselves ignore the fraction.
The truth is that the Government have missed the point of the real argument which we are advancing on behalf of the 10s.-cent system. The ease with which the Chancellor dismissed the question of associability is itself a pointer to this. In his argument this afternoon in favour of the £ system he in fact used the same considerations. There is an associability argument in relation to the keeping of the £ in the same way as there is an argument on associability in relation to shillings and pence if decimalised into almost the same figure.
The Chancellor has said that from the point of view of associability the advantage of the £ is that the major unit will be the same, that all existing coins above 6d. will have exact equivalents in decimal values and will be able to be used in shops, that the shilling and the florin will be of the same size, and that the people who handle the new coins will be trained to help people to associate the new with the old system. That being so it seems to me that unless there is an overwhelming case internationally for the maintenance of sterling, it is probably unnecessary, and certainly undesirable, to introduce a system which has its own complications, which takes it out of the main stream of the currency systems of the world, and which, whatever the advantages or disadvantages in cash machines and the like, will have the result that our cash registers will forever be odd in relation to those in other parts of the world. They will always be nonstandard. To do this for what on the Chancellor's argument is possibly an advantage of convenience, seems ridiculous.
The right hon. Member for Enfield, West put better than I can the point which I intended to make, but I think that it is worth underlining. So far from the position being that the £ unit will be an advantage internationally, I verily believe that from the point of view of the general currency position in the world it will be a disadvantage. I say this because if one looks at the situation in all the major industrial countries of the world one sees that the £ is a top-heavy final major unit of currency.
The tendency, even in countries which formerly used the £, has been to change

over to the 10s.-cent system. Like the right hon. Member for Enfield, West, I, too, was recently in Australia. There, because they changed to the 10s.-cent system, it was possible for the Government to abandon their long-term training provisions. Their people quickly became familiar with parallel coinage and they had no difficulty in going over to the new system. Without exception the people to whom I spoke expressed surprise that we were going into an unnecessarily complicated system which they believed would be a disadvantage. The researches which they had done had led them to prefer the 10s. to the £ system, which our Government has chosen.
In my view it would be foolish to retain a unit which is heavier than the heaviest of the other units among the major currencies of the world. If the time comes, which we are led to believe may be in the near future, for Britain to go into the Common Market, a true decimal system will be absolutely essential. The Government, by their decision, has unnecessarily increased our difficulties in that eventually. The Good Book says that it is the foolish man who has his eyes on the ends of the earth, so it is a foolish Government who consider what is to happen in 100 years' time without, as seems to be the case here, taking sufficient cognisance of the problems being created in the immediate future.
I support the Government wholeheartedly in turning over to decimal currency, but I regret that the Government have chosen this unit, that they have done so without sufficient discussion in this House, and that, in regard to a matter which surely should have been left to the judgment of hon. Members, they have chosen to have their way by imposing a Whip.

8.25 p.m.

Mr. Patrick Jenkin: I agree wholeheartedly with the last words of the hon. and learned Member for Warrington (Mr. W. T. Williams). It is a disaster that we should he discussing a Measure as crucially important as this on a day when we have had two Ministerial statements which took three-quarters of an hour out of our debating time, on a day when we had a Royal Commission, and when we have had a morning sitting which has


docked half an hour off the debate this evening.
I agree with the Government that it is right to retain the £, and I shall not repeat the arguments which were put so well by my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith).
In riposte to my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), I say that I was unimpressed by his argument that the £ is too heavy to decimalise. There are many firms today which do all their accounting in decimalised £s, including billing their customers, and no difficulties arise because of that.
This is a free vote on this side of the House, and I shall vote for the Government. I shall not vote for the Amendment because it deplores a system which includes the £. On the other hand, I believe that the Government are wrong in the subdivisions which they have chosen to introduce. The £-cent- ½-cent system is wrong and I believe we should have the £-florin-mil system instead.
I believe that the right answer is to keep the £ on the associability argument because then there is no change over the vast mass of transactions.
The hon. Member for Chislehurst (Mr. Macdonald) was right in saying that we have to draw a clear distinction between the handling of coins and the conducting of paper transactions. Once we have the coins in our hands, what matters is counting them. The problems of transition from the old to the new will arise whatever system is adopted. In the case of written transactions we shall have £s and decimals, and no great difficulty arises. The argument put forward about Centigrade and Fahrenheit is false, because both those systems have existed side by side and nobody has been forced to use Centigrade and to discard Fahrenheit.
The arguments for the use of the florin-mil sub-division fall under three heads. First, there is the coinage aspect, secondly, the question of flexibility, and, thirdly, the inflationary aspect, about which we have not heard a great deal this afternoon. The great advantage of the coinage system that I advocate is that it does away with the fraction. The reten-

tion of the vulgar fraction has been criticised by hon. Members on both sides of the House, and I agree with those criticisms. In written accounts it is unimportant, because decimals are used, but when dealing with Coinage the fraction can be very tiresome.
The florin-mil system would allow the retention of the 6d. piece. The powerful arguments put forward by the hon. Member for Orpington (Mr. Lubbock) about parking meters and telephone charges would be met if the 6d. piece could be retained. Those machines would not need to be changed. With the Government scheme we shall have one new penny, two new pennies, five new pennies, and ten new pennies, the first two coins representing 2·4d. and 4·8d., respectively. With the £-mil system, at this level there would be five coins—five mil, representing 1 ·2d., ten mil, representing 2·4d., 25 mil, equivalent to 6d., 50 mil, equivalent to Is., and 100 mil, equivalent to the florin. The great argument for that system is that we should be able to have exactly the same coins as with the 10s.- cent. system, with one addition, and we should have all the advantages which have rightly been claimed, on the coinage side, for that system.
The other great advantage would be that with the £-mil system we could go below the equivalent of 1·2d. We could have a two mil coin, equivalent almost exactly to the existing ½d. I agree with the Chancellor, however, that more scientific tests should be carried out on coin handling. I suggest that coins of the appropriate denomination should be made available to Members over the next few weeks, so that we can see them and handle them and make up our own minds which coins are better looking and are easier to handle.
The second argument for the system that I advocate is that it would enable us to have a smaller unit than 1·2d. The hon. Member for Glasgow, Springburn (Mr. Buchanan) put this argument very forcibly. It would allow for price changes in much smaller steps. It would allow price changes to take better account of cost changes. Cost accountants are accustomed to working to three places of decimals of a penny, and prices must also be free to move in very small stages.
Many of the products in daily use rise in price only by small amounts over the


years. I am thinking of such things as beer, bread, eggs, petrol, sugar, milk and tobacco. Price changes in these products are usually measured in halfpennies, and that situation must be allowed to continue. It is not always possible to adjust the size or weight of a package. It is often against the law. That means that we must have the greatest flexibility in pricing.
We must not under-estimate the total amount involved. If the cost of a packet of 10 cigarettes is increased by a halfpenny, people have to pay £24 million extra a year. If it rises by 1·2d. they pay no less than £58 million a year more. The difference represents the penalty that would be paid for having the smallest unit equivalent to 1·2d.
Unlike my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith), I believe that it is a disadvantage for price changes to be delayed because the smallest unit is too large. In my view there is a need for flexibility. If a price change is delayed later than the date when it should take place the return is reduced, and when the change has to be made it is greater than it otherwise need have been, thereby leading to inflation.
We must ensure that our system will be the most suitable for the Common Market, which I am sure we will join sooner or later. The important point there is that a large number of industries which sell their commodities in small units must have the maximum flexibility of pricing to enable them to phase in with competing products on the Continent. To condemn them to a smallest unit of 1·2d. is to make their task much more difficult in this important transition.
If we introduce a sales tax on the pattern of the Common Market sales taxes, we will need a much smaller coin. All those countries which have such a tax need a large number of the smallest coins to simplify transactions. There are 3,400 million pfennigs in circulation in Germany, amounting to 58 per head, compared with 15 halfpennies per head in this country. The Dutch have even more per head and America, with a large number of sales taxes, mints about 3,000 million cents every year and has done so for the past two years. There is no figure for the total in circulation. Only

the £-florin-mil system will provide this important flexibility. This argument has not been considered before the past few months, but the Government must listen to it.
Both the main systems must involve some measure of inflation because we are dealing with ladders of 12 rungs and 10, and thus the rungs are not exactly opposite. If the smallest unit is 1·2d. the temptation will be to increase prices more than if there were a smaller unit, the mil. The figures in paragraph 8 of Appendix 7 of the Halsbury Report show that the retention of the equivalent of the present halfpenny will reduce the inflationary effect by three times. Instead of it being 1½ points, it will be half a point.
This all represents a substantial improvement on either of the main systems advocated today. The case was hardly argued by the Halsbury Committee. This is a great pity, because it has much to be said for it. Even now, it is insufficiently understood, but it is now favoured by industry, which recognises that, as the Government are determined to keep the £, we should have the advantages of the system advocated by my right hon. Friend the Member for Enfield, West, plus the greater flexibility which a smaller coin would give. Assuming that the £ must be kept, the £-florin-mil is the better system of sub-dividing.
The Consumer Council, dismissed this argument in two cavalier paragraphs. They said that it was rejected by Halsbury. They were wrong: it was never argued by Halsbury. They said that it would inevitably involve three points of decimals. They were wrong: with the florin there can be two points. They said that the smallest coin would be the mil. They are wrong: the smallest would be 2 mils, equivalent to the halfpenny.
If these are the only arguments against the system, the case for it is even stronger. I recognise that, because of the polarity of the main arguments, the debate must be either for or against the Government's system. I believe that they are right in adhering to the £ and that the "ten-bobbers" are wrong.
Therefore, I shall vote for the Government, but I hope that I shall have an opportunity in Committee to press the case for the £-florin-mil system in more detail than time allows this evening.

8.40 p.m.

Mr. David Ginsburg (Dewbury): It is a strange experience for me to be aligned with the right hon. Member for Enfield, West (Mr. lain Macleod) in opposition to the hon. Member for Wanstead a ad Woodford (Mr. Patrick Jenkin) and my right hon. Friend the Chancellor. Listening to the speech of the right hon. Member for Enfield, West, it occurred to me to say to my right hon. Friend what a marvellous Chairman of the Decimal Currency Board he would have been. He proved, moreover, that the Government were wrong in their decision to decimalise the £. They may have been right to decimalise the currency, but if the intention is to try to keep the £ as a unit of currency, surely the answer is that one should go for the £-mil.
In the course of the debate, I was a little disappointed to hear that the Government and the Chancellor continue to lean on the Halsbury Report. It is rather strange for those of us on the Labour benches to hear our own Government giving support to a majority report. In the past, the Labour Party has made some of its greatest progress by espousing minority reports. I am reminded of Sydney and Beatrice Webb, George Woodcock, and Nicholas Kaldor. There is something to be said for looking at minority reports.
This debate has been sufficiently good natured to have convinced the Chancellor that he was mistaken not to have had a general debate and taken the feelings of the House, as happened in another place.
The main error of the Government and the Chancellor has been over the question of convenience to the public. Presumably we are decimalising for the convenience of the public and not for ideology. Therefore, it is an issue on which the public should be studied and even, to a degree, consulted.
I speak as one who is still professionally active in market research and, in terms of good management, it is fantastic that my right hon. Friend has not undertaken any sort of market research. In the Treasury, he has his own social survey team. He has not used it. The only empirical evidence from the public is that of Dr. Sheila Jones of the Medical Research Council. But the Chancellor was not fair in suggesting that her evidence pointed his way.
I am not sure whether he was in the Chamber when my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) referred to her letter in today's Financial Times. I would urge him to read that letter in full, because it shows such empirical evidence as he has is definitely against and not for him.
Turning to the international argument, I have looked at the Bank of England memorandum to the Halsbury Committee. It is very thin and pretty amateurish. The short answer to the Bank of England memorandum on the £ lies in paragraph 42 of the minority Report:
We believe that the City does itself less than justice by suggesting that a large section of foreign customers might take their business elsewhere as the result of such a decimalisation move, and so deprive themselves of the continued enjoyment of the integrity and unrivalled services and experience which the City gives.
The Chancellor is a courageous man but an obstinate one. He has been courageous in defence of the £. I would urge him to think again on some aspects of this proposal. There is nothing wrong in changing one's mind. In the Finance Bill of 1965, he made some major changes which were to the improvement of that Bill.
However, because I have the old-fashioned concept of loyalty and still live in some degree of hope, very reluctantly I shall go into the Division Lobby with him tonight.

8.45 p.m.

Mr. Gordon Campbell: The Chancellor of the Exchequer, moving the Second Reading, said in effect that we should not now argue any further about this issue but should come to a decision, but this is the first real opportunity we have had to argue about that at all. The point is that this debate should have taken place earlier or the Bill should have been delayed, and I believe that in recent months and weeks the Chancellor of the Exchequer and the Leader of the House have treated this House deplorably on this question.
This is not a party matter, but a matter pre-eminently for the House of Commons. It will closely affect every citizen in the land as consumers, shoppers, travellers and handlers of cash generally. Although the change is nearly four years ahead, the decision has to be taken during


the coming months. Many members of the public have not yet had the opportunity to consider the effects of decimalisation, but it is all the more important for that reason, as several hon. Members have pointed out, that their Parliamentary representatives should have had a chance to consider and debate decimalisation before Second Reading.
A currency change of this kind occurs only about every two centuries, but the Chancellor of the Exchequer has attempted to steamroller the Treasury's preferred system through the House without the chance of a general debate and apparently oblivious of the disagreement with the system voiced by most of the bodies representing the large majority of the country to be affected. The Press has been over-whelmingly against this proposed system. The Economist in December stated that the Government were proposing to carry out decimalisation in the worst possible way. Yet the right hon. Gentleman said on 7th March that there was very little protest in December.
Where has the Chancellor of the Exchequer been in recent months, when a great many bodies representing industry, commerce, transport, catering and other services, trade unions and the consumer organisations have been stating their views loudly in opposition to the £-new penny-½ system? A striking letter appeared in The Times on 12th December, signed by a number of distinguished persons representative of all walks of life in Britain and there were many other indications of disquiet and the need for a debate in this House.
Several hon. Members, including myself, made our concern clear. I had applied for one of the debates on the day when we adjourned for the Christmas Recess, before the Chancellor of the Exchequer's White Paper came out in December. My debate duly took place but it could be only 50 minutes of private Members' time. Before the debate, the right hon. Gentleman sent me a message asking me to cancel it as there would be a full debate in the House later. Thank heavens I did not comply with that request.
But in view of that attempt, I can only describe the words used by the Chancellor of the Exchequer on 7th March as thoroughly misleading. He then said:

It is very late for the Opposition to raise this question."—[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1242.]
Later the right hon. Gentleman said:
The protest started on the day that the Bill was introduced."—[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1242.]
That date was 1st March.
Because, fortunately, I had refused to accede to the right hon. Gentleman's request, my debate took place on 21st December. In it, I and another hon. Member—and other hon. Members by their interventions—made it clear that they criticised the Treasury's preferred system. More important, I asked for an assurance that action would not be taken to commit the country to a particular system before Parliament had considered the question. In reply, the Chief Secretary said:
The hon. Gentleman also asked me if I would state that no action had been taken, and could undertake that no action would be taken, to prejudice the issue between the two systems. Certainly no instructions have been given to machine companies or anything like that."—[OFFICIAL REPORT, 21st December, 1966: Vol. 738, c. 1513.]
That statement having been made in this House last December, one would like to know how the Chancellor of the Exchequer was able to say on 7th March:
Administrative decisions … have, of course, been taken and a number of companies, based on the decision announced by the Government over 12 months ago, have already entered into particular commitments on this matter."—[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1243.]
We had previously heard the sound of the approaching steam roller. Now it had arrived.
However, on the following day, the Press—and I am thinking of The Guardian in particular—reported statements by the companies that they were not committed; that they could still go for either system. We would therefore be interested to hear, in reply to a question put by one of my hon. Friends, what are the commitments, and what would be the financial cost of a change at this stage. Have any commitments been entered into before today's debate as regards the minting of the coins?
The Chancellor's reference to his announcement 12 months ago should not go without comment. The announcement on decimal currency was in a speech in this House after the General Election


had been announced and in a debate on Government conduct of the country's economic affairs. Naturally, no other hon. Members in that debate reverted to the subject of decimalisation. After the election a further statement was expected. In due course it arrived in the shape of a White Paper in December, but no one expected to take that first statement, included in a speech in the House at that time, as the last word.
In the same speech the Chancellor put forward another scheme, the mortgage option scheme. After the election that scheme was very quickly withdrawn and another different scheme was put forward. I have been on the Committee on the Bill referring to that matter. I know very well the differences between it and the scheme announced by the Chancellor in his speech of 1st March last year. He could easily have withdrawn this decimalisation proposal which was made in a similar way at the same time as the other scheme and he could have come forward with another proposal.
During the summer the Consumer Council and other bodies were active on the matter and a number of hon. Members gave clear indications of their doubts and their opposition to the system. In the event, we did all that is normally necessary to point out clearly our dissent and the need and wish for a debate on this important subject. I am afraid hon. Members on both sides of the House had little assistance from the Leader of the House on this matter. I am sorry that he is not here at this moment.
It was made clear on several occasions on Business Questions that a general debate should be held before the Bill was considered. The reaction of the Leader of the House can be explained only by his reply to a business Question last week when, with a revealing mental reflex he said:
… we consulted the Department ".—[OFFICIAL REPORT, 16th March 1967; Vol. 743, c. 721.]
I fear that the Department was not only consulted on this question but its view was allowed to prevail and, as a result, this House is being allowed today only to add its stamp to a Government decision. The Chancellor is presenting this system for endorsement only.
There is no dispute about the need for decimalisation, but it is vital that the best system should be adopted. That is the issue. It is pointless for the Government to base their argument on the Halsbury Committee Report because this question of the system was the very question which that Committee could not agree upon. Four members favoured a £ system while two favoured the 10s. unit system. Yet even at that time, over three years ago, the Report recorded that there had been a swing of opinion towards the 10s. unit, and that swing has continued apace since then.
As my right hon. Friend the Member for Enfield, West (Mr. kin Macleod) pointed out, the Halsbury Committee was much influenced by the international case. Also in considering the two competing systems the Committee said that the real decision was between the domestix advantages of the 10s. system and the international advantages, as the Committee saw them, of the £-cent-½ system. In the three years which have passed, the international argument has virtually disappeared. Even the Government gave some recognition to this in the White Paper, but the domestic advantages of the 10s. system have become clearer. While the country has benefited from the Halsbury Committee's excellent and unanimous advice on many aspects of decimalisation, it is wrong to have based the selection of the amount and system on the Committee's divided views on this subject. The Government's proposed system would not bring us the advantages of pure decimalisation. Unlike the decimal currencies in the world, we should have a fraction and virtually three units.
Here I would ask the House to consider the main principle and the advantage of moving to a decimal system. This is that it should be possible to express any sums of money in not more than two columns. At present our currency is clumsy, because we need four columns.—pounds, shillings, pence, and a halfpenny. The Government's proposed system would entail using three columns. To achieve the full advantages of decimalisation, one has to select a major unit of a size such that division into 100 parts will provide a small unit whose size is small enough to cater for all reasonable transactions. That is the way in which a


decimal system which will express any sum of money in two columns only is found. This is the kernel of the matter.
It will not work, as my right hon. Friend the Member for Enfield, West pointed out with devastating clarity, with the £. This is why the Government have had to produce their fraction, but it is possible with the 10s. unit. It also explains why other variations have been put forward—for example, the £ divided into 1,000, producing mils. Here the smallest unit would be smaller than required, but at least it would eliminate the egregious fraction. I understand the explanations of this that have been put forward by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin).
This was something which the C.B.I. put forward, but only after pressing the 10s. system and finding the Government adamant against it. Here I quote from the C.B.I. Journal of 3rd March:
It became clear in the end that industry's order of preference was for the 10s.-cent system first, for the pound-mil next and the pound-cent a bad last.
There is also the proposal for a £5 unit which the hon. Member for Swindon (Mr. Francis Noel-Baker) has put forward. This is the 10s. system with the decimal point moved one place, but the smallest unit would be the same. The disadvantage of dividing the main unit into 1,000 rather than 100, which is common to these two systems, is that large figures would have to be used for fairly small transactions in shillings. A housewife shopping would be involved with figures like 755 when she was in the area of 15s., and the conversion from present sums would not be simple. What is common ground to almost everyone who has considered this subject is that the Government have selected the worst of the possible systems.
I will now consider the 10s. system, because this is the one that has the large majority of support in the country. My right hon. Friend gave the main reasons for its advantages over the Government's proposed system. I should like to stress four points in particular—its simplicity; the advantage that it is less likely to cause price increases; that the changeover period would be much easier; and that it would be less expensive to introduce.
On simplicity, conversion is much easier from the present currency. This has been made clear by a number of hon. Members. The hon. Member for Chislehurst (Mr. Macdonald) argued against this, because he said that it was not exact conversion. That is the reason for the awful word "associability" which has come in. All prices are not convertible to within a penny, but at least the housewife or other shopper can see at a glance whether the price is roughly in the area she is expecting; she can compare when she moves into the new system.
Furthermore, the fraction will preclude the simplicity which a decimal currency should enjoy. Because of the fraction, there is a danger that prices will be rounded off upwards. That is what the consumers organisations have been worried about, and that is where the Chancellor misunderstood the argument, although I did not press to interrupt him. He said that the argument was that the fraction would disappear, and that prices would be rounded off upwards. But that is not what bothers the consumer organisations. They are worried that people will try to avoid the fraction, although it still exists, and are then likely to push the price upwards rather than downwards.
The change-over period is expected to be about two years. We have heard that in Australia, because the 10s. unit was so successful, they have been able to reduce the period to 18 months. During the change-over period here, the old and new currencies will have to circulate together. Under the 10s. system only two new coins are required to replace the present bronze coins—the smallest coins. All our present silver coins, or more correctly cupronickel coins, could continue. If I did not mishear the Chancellor, he said that under this system all the coins above 6d. will continue, but that is not so. The half crown will have to go, because it becomes a fraction. Under the Government system, four new coins are necessary. The Government are introducing five and suggest that they may introduce a sixth. The sixpence must disappear because that is also a fraction.
During the transition period all those coins will be circulating together. There will be our present currency, including pennies and the sixpence, which will become 2½ new pennies, together with


five new coins in the new currency called new pennies and new halfpennies having a different value from the existing ones. They will all circulate together for about two years, and no one will bless the Chancellor who introduced this system. Apart from the general public, those who must handle cash, like bus conductors, shop assistants, newspaper vendors and cashiers will find that their transactions with their customers are slow and difficult.
The change-over under the 10s. system would be less expensive, not only because only two new coins would be needed but because meters and vending machines depending upon shillings, sixpences and half-crowns would not need alteration. It is not surprising that Australia, New Zealand and South Africa have all decided on the 10s. system. The White Paper, "Decimal Currency in the United Kingdom", published last December, refers to them at various points, but it is remarkable that not a word is said recording or revealing that they have all adopted the 10s. system.
I now turn to the argument for the £ unit. I am not one of those who have said that there are no advantages in it, because I agree that there is the familiarity of the name and its international standing abroad. But that is not in itself a good enough reason to make decimalisation the kind of operation which the right hon. Gentleman now proposes, that is, a mix-up between fractions and decimals and the other troubles which we have discussed. A modernised, efficient and workable currency without a fraction could strengthen sterling in world esteem.
Both the Chancellor and my hon. Friend the Member for Cities of London and Westminster (Mr. John Smith) mentioned the question of international trade. But that is vague; we do not have the information. The Halsbury Committee did not investigate it. I believe that both that question and the question of market research, which has also been mentioned, need to be examined before the Chancellor goes ahead with the Bill. I hope that he will withdraw it while that very necessary research is carried out.
The Chancellor said that the arguments are still the same as at the time of the Halsbury Committee, but the point is that their weight has altered. Some

of the arguments are much more weighty than the others. The Government seem determined—unless we hear something different from the Chief Secretary—to foist a bastard decimal-fraction currency upon the country. Regrettably, the vote tonight cannot represent the true feelings of the House owing' to a Whip having been imposed on the Government side. There is, however, a free vote on this site of the House. This is not a party political matter. I am aware that many hon. Members opposite do not like the new penny-½ system and some have made it clear today. If there were a really free vote I am certain that the 10s. unit system would get a substantial majority.
There are hon. Members opposite who are concerned because of the effects on the general public and their constituents and because of the views of the T.U.C., the Co-operative movement and trade or transport undertakings with which they are associated. They are not rebels and should not be treated as such. Nor is the subject related to the Common Market, Vietnam or the pay freeze. Yet the Whip has been imposed. They should never have been put in this dilemma and I sympathise with them. I hope that they will exercise their right of conscience because I cannot believe that a non-party question which affects the daily life of every citizen can really be regarded as a matter of party discipline.
If the Government do nevertheless press on with the Bill, it will become clear that they have chosen a new method of minting coinage and that their new instrument for minting it is the steamroller. It may give the Government a feeling of security in this House but it is crushing the expression of a free and true opinion in this House. It will not remove the problem. The Government are pressing through a system likely to meet increasing opposition, from those who have to use it as they learn what is entailed. The Chancellor will come to regret that he chose earlier to ignore both this House and representative bodies outside.

9.7 p.m.

The Chief Secretary to the Treasury (Mr. John Diamond): I am sure that my right hon. Friend the Chancellor of the Exchequer will share my view that, considering the tone of the arguments that have been used in the Press and in


a great deal of the propaganda put forward, no complaint can be made about the debate. Many views have been expressed. It is absolutely right to say that this is not a party issue, because we have had support for my right hon. Friend's proposal from both sides of the House. It has been opposed on both sides. We have had alternative proposals from both sides. [HON. MEMBERS: "Then why the Whip?"] I shall answer that in a moment.
If we were exclusively concerned—which we are not necessarily and technically concerned with—with the principle of decimalisation there would be no vote at all. I am sure of that. The whole House approves decimalisation. The Halsbury Committee was set up by right hon. Members opposite. It reported and my right hon. Friend announced the present Government's decision. I am not going so far as to say that had the Opposition still been in Government they would have announced their decision, because at the moment I want to keep on ground which does not raise passions. It is clear that the House is in favour of decimalisation, and in that sense we can call this an historic day, for the system that we have had has been with us for hundreds and, in certain respects, for over a thousand years. But the whole House is almost unanimously agreed that we shall now move forward to a decimalised system.
In such an important decision, the Chancellor would naturally wish that full discussions and collection of the views of everyone should take place, and there has been some objection that this has not been done. I really cannot understand that complaint, and I hope that those who feel that way will bear with me while I recite some of the facts. As my right hon. Friend said, the Committee, set up by the last Government, went to enormous lengths and into enormous detail to receive and sift evidence before reaching its conclusion. I have no need to go over it, for the Chancellor of the Exchequer has already done so.
A full year ago, in March, 1966, the Chancellor of the Exchequer made a perfectly clear statement about decimalisation. The interest shown was minimal. The objections were negligible. So far as one could test public opinion, it was

in support of decimalisation related to the £. There was no means of knowing that hon. Members on either side of the House wished to press the matter, until much more recently.
The hon. Member for Moray and Nairn (Mr. G. Campbell) said that he wished that he could have had the opportunity to have a debate when the White Paper was issued. He knows that he had that opportunity. He made an interesting and lengthy speech—and he was not the only one—and his views were made absolutely clear and I had the pleasure of listening to every word. It is not the case that the House has not had the opportunity of having a debate on this topic.
My right hon. Friend feels that we should now move on, for the reasons indicated by many speakers. What is business to do and what is industry to do, having regard to my right hon. Friend's statement of more than a year ago? They want to know whether we mean business and the answer is that we do. It is the Government's responsibility, having listened carefully to all the arguments and having read all the reports and having gone to endless trouble, as they should, to send skilled individuals to study what is happening in other countries which are going through the same kind of experiment, to make up their minds. We had to make up our minds because nobody else would. The Opposition are not doing so, but are doing exactly what my right hon. Friend complained about—adding their voice to opposing what is proposed.
There are all sorts of people who are opposed to this method and if we were to have a free vote, we would need at least six Lobbies. We would need an 8s. 4d. Lobby to support a system which has not been mentioned today, but which is a solid and reliable system for 100 pennies. We would need a ten-bob Lobby and a 10s.½ Lobby, we would need a £-cent-half Lobby—the present proposal and we would need a £-mil Lobby for the idea put forward in a very persuasive speech by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and a £5-mil Lobby for the idea put forward by my hon. Friend the Member for Swindon (Mr. Francis Noel-Baker). The Halsbury Report indicates that all those


are solid proposals. Many of them have advantages.
As my right hon. Friend said, any one system would probably have a majority against it. We are all politicians and we are all aware of that phenomenon. But the Government have to make up their minds and on balance they take the view, after the carefully considered Report of the Halsbury Committee and the further consideration which the Government have given, assisted by Departments and officials, including those in the Treasury who are well informed about these matters, that this is the right system.

Sir Robert Cary: Surely the Leader of the House has been under a permanent obligation since last March to give the House an opportunity to discuss the matter before the presentation of the Bill.

Mr. Diamond: I cannot speak from first-hand knowledge for I am not always here when the Leader of the House is questioned about business, but I am told that in the last three months there has been no request of this kind. The hon. Member for Manchester, Withington (Sir R. Cary) is better informed about what goes on in this place than most of us are, and if he so much wanted a debate, he knows that the Opposition always have the opportunity to secure a debate on any topic which they feel to be of great interest and on which the House is not in step with the Government.
There has been no such request to devote a Supply day to this. I refer to these matters delicately, but it was right that those distinguished and knowledgeable Members of Parliament who are members of the Parliamentary Labour Party Economic Group should have an opportunity of discussing this matter at first hand with the Chairman of this Committee, who was courteous enough to come along and address them. All ten of them turned up to listen.

Mr. Brooks: Is it not true that the date of that meeting happened to be the date on which the Bill had been printed?

Mr. Diamond: It is true that that was notified. I do not want to go into it with indelicate definition. It is true that the date had been notified and, had there been a tremendous interest in this, of

course there would have been more Members. I do not know how many Members turned up on a similar occasion when the Chairman addressed Conservative Members. The short point is that there is clear evidence that the time had arrived for the Chancellor to make up his mind. He announced his decision, a White Paper was published, and there has been every opportunity for pushing points of view.
The Chancellor, as everyone knows, is anything but arbitrary. [Laughter.] I should know. I have worked with my right hon. Friend and I have worked in this House. I have never listened to more criticism than came from this House on the number of occasions when the Chancellor had changed his mind on a number of tax proposals. Every time that he acceded to a request to change his mind, the Chancellor and I were criticised on the grounds that we were flabby, flexible, could not make up our minds, and did not know where we were going. The House cannot have it both ways. As everyone knows, my right hon. Friend is anything but inflexible.
We have our responsibility as a Government, particularly to those about whom I have been asked questions. I have been asked what commitments have been entered into. I want to make it absolutely clear to the hon. Gentleman the Member for Moray and Nairn that what I told him previously was absolutely true and it is precisely true today. There have been administrative decisions made and some administrative planning. It costs something to sit round a table and plan, but that is not the cost which is referred to in his question, or that of one of his hon. Friends.
I have been asked what cost has been incurred, and the answer is that no commitment has been undertaken by the Government, or in the public sector which would in any sense prevent us from changing our minds now. It is open to Parliament to come to its decision. We said that and we have maintained it. Until we have the authority of Parliament, we do not propose to undertake any commitments of that kind.
I am not able to answer the hon. Gentleman about what others may have done. It is completely beyond my knowledge, but it is clear that those who want to meet a given date will have to be


making arrangements, and it is our responsibility to let them know that they can go ahead with those arrangements, without being incommoded and put to nugatory expense through a Government's vacillation. I hope that I have dealt fairly and fully with the points raised.

Mr. Lubbock: Could the right hon. Gentleman say what information was given to the National Cash Register Company at the meeting held with it on 13th April, 1966, three months before the White Paper was published, and whether he knows of any decisions made by that company to go ahead with its plan for a £-cent-½ system?

Mr. Diamond: I gather that the hon. Gentleman has had a communication from my right hon. Friend and he therefore knows the answer to that question. [Interruption.] If the hon. Gentleman had thought it important, he would have raised the matter when he spoke. He did not think it important to refer to it then.

Mr. Lubbock: I asked whether the Chancellor of the Exchequer would tell me with what organisations consultations had been held. He has courteously—

Mr. Speaker: Order. Interventions must be brief at this stage.

Mr. Lubbock: The information which he gave me was that a meeting was held with the National Cash Register Company on 13th September, 1966—

Mr. Speaker: Order. The hon. Member must take note of what the Chair says.

Mr. Diamond: I want to help the hon. Gentleman as much as I can, notwithstanding that he is raising a point which he could well have made in his speech and which he could make in Committee.
I understand from my right hon. Friend that he has received many delegations, including this one, and told them the same thing, namely, what the Government's proposal was and that the Government were not entering into any commitment until they had Parliament's authority. This is known to everybody. There is nothing unusual, secret or mysterious about it.
May I proceed with the arguments used against the proposal, because it is clear that there is no proposal for any other system on the Order Paper. The

Motion on the Order Paper, as one expected, criticises the system which the Government propose.
There are a number of possibilities. However, once one accepts, as I think one is bound to accept, the logic of the Report as to the likely future falling into disuse of the halfpenny equivalent, then only two systems come up for final consideration. Of the two systems, the Committee, by a majority, came down in favour of the one which the Government propose. A number of Members, including the right hon. Gentleman, have sought to destroy that decision by saying, in effect, that the reasons which the Committee adduced were the wrong reasons, or that one of the subscribers to the majority Report has since changed her mind.

Mr. Iain Macleod: No.

Mr. Diamond: That has been suggested, not by the right hon. Gentleman.
Therefore, may I make it absolutely clear that Dame Anne Godwin has not changed her mind. She was, and remains, for the £, the system which is in the Report and in the Bill. She reached her decision without attaching importance to the international case. I have been authorised to make this statement. Let us be clear about this: the majority was and remains solid.
The right hon. Gentleman said, surprisingly enough—and this point has been taken up by a number of speakers—that the international case was stated in the Report to be the dominating argument, as a result of which the majority reached its conclusion. One part of the Report has been quoted time and again. I am absolutely astonished that we have never heard today the whole of it. May I read the part which has been quoted and then, to put it in context, read the real conclusion of the Committee.
Paragraph 383, which has been quoted, says:
From a purely domestic point of view the 10s.-cent system without a fraction offers, on balance, the best system for the immediate future and the smoothest transition ".
But it says "for the immediate future". Towards the end of paragraph 384, it is said:
Confining our examination to transitional matters relating to the introduction of the decimal system, we concluded that the disadvantages


of the £-cent system as opposed to a 10s.-cent system were a price well worth paying, in the general interest, to avoid risk to the international standing of sterling".
Paragraph 385 goes on:
If we look further ahead than the transitional period, the balance of advantage, even without the ' international' case, inclines, in our view, increasingly towards the £-cent-½ system.
I cannot understand why one of my hon. Friends built the whole of his case on the one argument that the international case had determined the decision of the majority and that if the international case is removed, the majority evaporates and one comes back to a 10s. system. There is nothing to support that.

Mr. Iain Macleod: The right hon. Gentleman is looking at the wrong paragraph. I referred not to paragraph 383, but to paragraph 373, in which he will find in heavy print the words which I quoted. The Halsbury Committee said, in effect, that it boils down to
The ' international' case for the £ versus the associability' case for the 10s. system.

Mr. Diamond: I agree that the right hon. Gentleman referred to that paragraph. I remember looking at the bold type. If one takes that paragraph together with what I have read, it becomes absolutely clear. The paragraph from which I read is only 10 paragraphs later and the right hon. Gentleman said that he had read the whole Report carefully. Of course he has. He would have seen that the Report says in the most specific terms, which I have read out, that if one refers purely to the transitional period, these arguments balance one another perhaps, but that when going further ahead, as we want to do, without question and even ignoring the international case the Committee came down on balance in favour of the system which is proposed. One is bound to do that for all the reasons which have been adduced by those hon. Members, including many of my hon. Friends, who support what the Government are proposing.
There are several long-term advantages in connection with the £. On the short term, the question of associability

is fairly evenly balanced. It is remarkable with what skill people can adjust themselves to handling different coins and currencies once they are compelled to do so—once, that is to say, the coins which they are at present handling are removed.

My right hon. Friend the Chancellor has made it clear that there will be the fullest preparation. All the experience in other countries is that with careful preparation there is easy transition. It is not the unit which is chosen but the preparation that is made that determines whether the transition shall be easy.

The value of having a £ which we know about, which is the same and which has the same value, the same name and the same international reputation, putting it no higher than that, is of such long-term advantage that it should not be easily thrown away. An overwhelming case against it has to be demonstrated to justify throwing away something which has stood us in good stead over all these years.

Particularly if a Government are inviting the whole community to go, as they are, into a new situation with some unfamiliar coins and some unfamiliarity in the decimal system, as is inevitable, it is surely right that a responsible Government should say, "Here is something you can hang on to, something you know all about. It is absolutely familiar. It is what you have been having your wages in, what you have paid your rent in and what you have been buying your motor car or your television with. It is what you have been used to for your housekeeping allowance." It is surely right that the Government should see that a citizen should know and handle a £ note which is familiar and will continue to be familiar in an unfamiliar system.

For these reasons, I feel sure that the House will give us the Second Reading of the Bill.

Question put, That the words proposed to be left out stand part of the Question: —

The House divided: Ayes 261. Noes 169.

Division No. 298.]
AYES
[9.30 p.m.


Abse, Leo
Archer, Peter
Atkinson, Norman (Tottenham)


Albu, Austen
Armstrong, Ernest
Awdry, Daniel


Allen, Scholefield
Ashley, Jack
Bagier, Gordon A. T.




Barnes, Michael
Hall-Davis, A. G. F.
Ogden, Eric


Barnett, Joel
Hamling, William
Oram, Albert E.


Baxter, William
Hannan, William
Orbach, Maurice


Bell. Ronald
Haseldine, Norman
Orme, Stanley


Bellenger, Rt. Hn. F. J.
Hattersley, Roy
Oswald, Thomas


Benn, Rt. Hn. Anthony Wedgwood
Hazell, Bert
Owen, Dr. David (Plymouth, S'tn)


Bennett, James (G'gow, Bridgeton)
Healey, Rt. Hn. Denis
Page, Derek (King's Lynn)


Bidwell, Sydney
Heffer, Eric S.
Palmer, Arthur


Bishop, E. S.
Herbison, Rt. Hn. Margaret
Pannell, Rt. Hn. Charles


Blenkinsop, Arthur
Horner, John
Park, Trevor


Booth, Albert
Houghton, Rt. Hn. Douglas
Parker, John (Dagenham)


Boston, Terence
Howarth, Harry (Wellingborough)
Parkyn, Brian (Bedford)


Bottomley, Rt. Hn. Arthur
Howarth, Robert (Bolton, E.)
Pavitt, Laurence


Bowden, Rt. Hn. Herbert
Howell, Denis (Small Heath)
Peart, Rt. Hn. Fred


Boyden, James
Howie, W.
Pentland, Norman


Braddock, Mrs. E. M.
Hoy, James
Perry, Ernest G. (Battersea, S.)


Bray, Dr. Jeremy
Huckfield, L.
Perry, George H. (Nottingham, S.)


Brown, Rt. Hn. George (Belper)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Prentice, Rt. Hn. R. E.


Brown, Hugh D. (G'gow, Provan)
Hughes, Emrys (Ayrshire, S.)
Price, Christopher (Perry Barr)


Brown, Bob(N'c'tle-upon-Tyne,W)
Hughes, Hector (Aberdeen, N.)
Price, Thomas (Westhoughton)


Brown, R. W. (Shoreditch &amp; F'bury)
Hughes, Roy (Newport)
Price, William (Rugby)


Buchan, Norman
Hunter, Adam
Probert, Arthur


Buchanan, Richard (G'gow, Sp'burn)
Hynd, John
Pursey, Cmdr. Harry


Butler, Herbert (Hackney, C.)
Irvine, A. J. (Edge Hill)
Rankin, John


Callaghan, Rt. Hn. James
Jackson, Colin (B'h'se &amp; Spenb'gh)
Redhead, Edward


Cant, R. B.
Janner, Sir Barnett
Rees, Merlyn


Carmichael, Neil
Jay, Rt. Hn. Douglas
Reynolds, G. W.


Cary, Sir Robert
Jenkin, Patrick (Woodford)
Richard, Ivor


Castle, Rt. Hn. Barbara
Jenkins, Hugh (Putney)
Roberts, Goronwy (Caernarvon)


Chapman, Donald
Jenkins, Rt. Hn. Roy (Stechford)
Roberts, Gwilym (Bedfordshire, S.)


Coe, Denis
Jones, Dan (Burnley)
Robinson,Rt.Hn.Kenneth (St.P'c'as)


Coleman, Donald
Jones,Rt.Hn.Sir Elwyn (W.Ham,S.)
Robinson, W. O. J. (Walth'stow, E.)


Concannon, J. D.
Jones, J. Idwal (Wrexham)
Rodgers, William (Stockton)


Crawshaw, Richard
Jones, T. A. (Rhondda West)
Rogers, George (Kensington, N.)



Judd, Frank



Crostand, Rt. Hn. Anthony
Kelley, Richard
Rose, Paul


Crossman, Rt. Hn. Richard
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Ross, Rt. Hn. William


Cullen, Mrs. Alice
Kerr, Dr. David (W'worth, Central)
Rowlands, E. (Cardiff, N.)


Dalyell, Tam
Kerr, Russell (Feltham)
Shaw, Arnold (Ilford, S.)


Darling, Rt. Hn. George
Kimball, Marcus
Shinwell, Rt. Hn. E.


Davidson, Arthur (Accrington)
Lawson, George
Shore, Peter (Stepney)


Davies, Dr. Ernest (Stretford)
Lee, Rt. Hn. Frederick (Newton)
Short,Rt.Hn.Edward (N'c'tle-u-Tyne)


Davies, G. Elfed (Rhondda, E.)
Lee, Rt. Hn. Jennie (Cannock)
Short, Mrs. Renée(W'hampton,N.E.)


Davies, Ednyfed Hudson (Conway)
Lestor, Miss Joan
Silkin, Rt. Hn. John (Deptford)


Davies, Harold (Leek)
Lever, Harold (Cheetham)
Silverman, Julius (Aston)


Davies, Ifor (Gower)
Lever, L. M. (Ardwick)
Silverman, Sydney (Nelson)


Davies, Robert (Cambridge)
Lewis, Arthur (W. Ham, N.)
Skeffington, Arthur


Delargy, Hugh
Lewis, Ron (Carlisle)
Slater, Joseph


Dewar, Donald
Loughlin, Charles
Small, William


Diamond, Rt. Hn. John
Luard, Evan
Smith, John


Doig, Peter
Lyon, Alexander W. (York)
Snow, Julian


Donnelly, Desmond
Lyons, Edward (Bradford, E.)
Spriggs, Leslie


Dunnett, Jack
Mabon, Dr. J. Dickson
Steele, Thomas (Dunbartonshire, W.)


Dunwoody, Mrs. Gwyneth (Exeter)
McBride, Neil
Stewart, Rt. Hn. Michael


Eadie, Alex
MacColl, James
Stonehouse, John


Edwards, Robert (Bilston)
MacDermot, Niall
Swingler, Stephen


Edwards, William (Merioneth)
Macdonald, A. H.
Taverne, Dick


Ellis, John
McKay, Mrs. Margaret



English, Michael
Mackenzie, Gregor (Rutherglen)
Thomas, George (Cardiff, W.)


Ennals, David
Mackie, John
Tinn, James


Ensor, David
Mackintosh, John P.
Tomney, Frank


Evans, Ioan L. (Birm'h'm, Yardley)
Maclennan, Robert
Urwin, T. W.


Faulds, Andrew
MacMillan, Malcolm (Western Isles)
Varley, Eric G.


Fernyhough, E.
McMillan, Tom (Glasgow, C.)
Wainwright, Edwin (Dearne Valley)


Fitch, Alan (Wigan)
McNamara, J. Kevin
Walden, Brian (All Saints)


Fitt, Gerard (Belfast, W.)
Mallalieu, E. L. (Brigg)
Walker, Harold (Doncaster)


Fletcher, Raymond (Ilkeston)
Mallalieu,J.P.W.(Huddersfield,E.)
Watkins, David (Consett)


Fletcher, Ted (Darlington)
Marquand, David
Weitzman, David


Foot, Sir Dingle (Ipswich)
Mason, Roy
Wells, William (Walsall, N.)


Foot, Michael (Ebbw Vale)
Maude, Angus
Whitaker, Ben


Ford, Ben
Maxwell, Robert
White, Mrs. Eirene


Forrester, John
Mellish, Robert
Whitlock, William


Fowler, Gerry
Mendelson, J. J.
Wigg, Rt. Hn. George


Fraser, John (Norwood)
Millan, Bruce
Willey, Rt. Hn. Frederick


Freeson, Reginald
Mitchell, R. C. (S'th'pton, Test)
Williams, Alan Lee (Hornchurch)


Gardner, Tony
More, Jasper
Williams, Mrs. Shirley (Hitchin)


Ginsburg, David
Morgan, Elystan (Cardiganshire)
Williams, W. T. (Warrington)


Gourlay, Harry
Morris, Alfred (Wythenshawe)
Willis, George (Edinburgh, E.)


Greenwood, Rt. Hn. Anthony
Morris, Charles R. (Openshaw)
Wilson, Geoffrey (Truro)


Gregory, Arnold
Morris, John (Aberavon)
Wilson, Rt. Hn. Harold (Huyton)


Grey, Charles (Durham)
Moyle, Roland
Wilson, William (Coventry, S.)


Griffiths, David (Rother Valley)
Mulley, Rt. Hn. Frederick
Winnick, David


Griffiths, Rt. Hn. James (Llanelly)
Murray, Albert
Woodburn, Rt. Hn. A.


Griffiths, Will (Exchange)
Newens, Stan
TELLERS FOR THE AYES:


Gunter, Rt. Hn. R. J.
Noel-Baker, Francis (Swindon)
Mr. Harper and


Hale, Leslie (Oldham, W.)
Oakes, Gordon
Mr. Walter Harrison.







NOES


Alison, Michael (Barkston Ash)
Gibson-Watt, David
Murton, Oscar


Astor, John
Giles, Rear-Adm. Morgan
Neave, Airey


Atkins, Humphrey (M't'n &amp; M'd'n)
Gilmour, Ian (Norfolk, C.)
Noble, Rt. Hn. Michael


Baker, W. H. K.
Gilmour, Sir John (Fife, E.)
Nott, John


Barber, Rt. Hn. Anthony
Glover, Sir Douglas
Onslow, Cranley


Batsford, Brian
Godber, Rt. Hn. J. B.
Orr-Ewing, Sir Ian


Bennett, Sir Frederic (Torquay)
Goodhew, Victor
Osborn, John (Hallam)


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Grant, Anthony
Page, Graham (Crosby)


Berry, Hn. Anthony
Grant-Ferris, R.
Pardoe, John


Bessell, Peter
Gresham Cooke, R.
Peel, John


Biffen, John
Grieve, Percy
Percival, Ian


Birch, Rt. Hn. Nigel
Griffiths, Eldon (Bury St. Edmunds)
Peyton, John


Blaker, Peter
Grimond, Rt. Hn. J.
Pounder, Rafton


Bossom, Sir Clive
Gurden, Harold
Powell, Rt. Hn. J. Enoch


Boyd-Carpenter, Rt. Hn. John
Hall, John (Wycombe)
Prior, J. M. L.


Boyle, Rt. Hn. Sir Edward
Hamilton, Michael (Salisbury)
Pym, Francis


Braine, Bernard
Harris, Reader (Heston)
Quennell, Miss J. M.


Brinton, Sir Tatton
Harrison, Col. Sir Harwood (Eye)
Renton, Rt. Hn. Sir David


Bromley-Davenport,Lt.-Col.Sir Walter
Harvie Anderson, Miss
Ridley, Hn. Nicholas


Brown, Sir Edward (Bath)
Hastings, Stephen
Ridsdale, Julian


Bruce-Gardyne, J.
Hawkins, Paul
Robson Brown, Sir William


Buchanan-Smith, Alick Angus, N&amp;M)
Heald, Rt. Hn. Sir Lionel
Rodgers, Sir John (Sevenoaks)


Buck, Antony (Colchester)
Heseltine, Michael
Rossi, Hugh (Hornsey)


Bullus, Sir Eric
Higgins, Terence L.
Royle, Anthony


Burden, F. A.
Hiley, Joseph
Russell, Sir Ronald



Hill, J. E. B.
Scott, Nicholas


Campbell, Gordon
Hobson, Rt. Hn. Sir John
Sharples, Richard


Carlisle, Mark
Holland, Philip
Shaw, Michael (Sc'b'gh &amp; Whitby)


Carr, Rt. Hn. Robert
Hornby, Richard
Sinclair, Sir George


Channon, H. P. G.
Howell, David (Guildford)
Stainton, Keith


Clegg, Walter
Hunt, John
Steel, David (Roxburgh)


Cooke, Robert

Stodart, Anthony


Cordle, John
Joseph, Rt. Hn. Sir Keith
Stoddart-Scott, Col. Sir M. (Ripon)


Corfield, F. V.
Kerby, Capt. Henry
Summers, Sir Spence[...]


Craddock, Sir Beresford (Spelthorne)
Kirk, Peter
Taylor, Sir Charles (Eastbourne)


Crawley, Aidan
Kitson, Timothy
Teeling, Sir William


Crouch, David
Knight, Mrs. Jill
Thorpe, Rt. Hn. Jeremy


Cunningham, Sir Knox
Langford-Holt, Sir John
Turton, Rt. Hn. R. H.


Currie, G. B. H.
Legge-Bourke, Sir Harry
van Straubenzee, W. R.


Dalkeith, Earl of
Lewis, Kenneth (Rutland)
Vaughan-Morgan, Rt. Hn. Sir John


Dance, James
Lloyd, Rt. Hn. Selwyn (Wirral)
Vickers, Dame Joan


Davidson,James (Aberdeenshire,W.)
Loveys, W. H.
Wainwright, Richard (Colne Valley)


Dean, Paul (Somerset, N.)
McAdden, Sir Stephen
Walker, Peter (Worcester)


Digby, Simon Wingfield
Mackenzie, Alasdair (Ross&amp;Cromarty)
Walters, Dennis


Dodds-Parker, Douglas
Macleod, Rt. Hn. Iain
Ward, Dame Irena


Doughty, Charles
McMaster, Stanley
Weatherill, Bernard


Douglas-Home, Rt. Hn. Sir Alec
Macmillan, Maurice (Farnham)
Webster, David


du Cann, Rt. Hn. Edward
Maddan, Martin
Whitelaw, Rt. Hn. William


Eden, Sir John
Marten, Neil
Wills, Sir Gerald (Bridgwater)


Elliott, R.W.(N'c'tle-upon-Tyne,N.)
Mawby, Ray
Winstanley, Dr. M. P.


Emery, Peter
Maxwell-Hyslop, R. J.
Wood. Rt Hn. Richard


Evans, Gwynfor (C'marthen)
Maydon, Lt.-Cmdr. S. L. C.
Worsley, Marcus


Eyre, Reginald
Miscampbell, Norman
Wright, E.


Fisher, Nigel
Mitchell, David (Basingstoke)
Wylie, N. R.


Fletcher-Cooke, Charles
Monro, Hector
Younger, Hn. George


Fortescue, Tim
Morgan, Geraint (Denbigh)



Foster, Sir John
Morrison, Charles (Devizes)
TELLERS FOR THE NOES:


Fraser,Rt.Hn.Hugh (St'fford &amp; Stone)
Mott-Radclyffe, Sir Charles
Mr. Goodhart and Mr. Lubbock.

Main Question put and agreed to.

Bill accordingly read a Second time.

Mr. Peter Bessell: I beg to move, That the Bill be committed to a Committee of the whole House.

Question put:—

The House divided: Ayes 171. Noes 246.

Division No. 299.]
AYES
[9.42 p.m.


Alison, Michael (Barkston Ash)
Biffen, John
Buck, Antony (Colchester)


Astor, John
Birch, Rt. Hn. Nigel
Bullus, Sir Eric


Atkins, Humphrey (M't'n &amp; M'd'n)
Blaker, Peter
Burden, F. A.


Awdry, Daniel
Boyd-Carpenter, Rt. Hn. John
Campbell, Gordon


Baker, W. H. K.
Boyle, Rt. Hn. Sir Edward
Carlisle, Mark


Barber, Rt. Hn. Anthony
Braine, Bernard
Carr, Rt. Hn. Robert


Batsford, Brian
Brinton, Sir Tatton
Cary, Sir Robert


Bell, Ronald
Bromley-Davenport,Lt.-Col.SirWalter
Channon, H. P. G.


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Brown, Sir Edward (Bath)
Clegg, Walter


Berry, Hn. Anthony
Bruce-Gardyne, J.
Cooke, Robert


Bessell, Peter
Buchanan-Smith,Alick(Angus,N&amp;M)
Corfield, F. V.




Craddock, Sir Beresford (Spelthorne)
Higgins, Terence L.
Percival, Ian


Crawley, Aidan
Hiley, Joseph
Peyton, John


Crouch, David
Hill, J. E. B.
Powell, Rt. Hn. J. Enoch


Cunningham, Sir Knox
Hobson, Rt. Hn. Sir John
Prior, J. M. L.


Currie, G. B H.
Holland, Philip
Pym, Francis


Dalkeith, Earl of
Hordern, Peter
Quennell, Miss J. M.


Dance, James
Hornby, Richard
Renton, Rt. Hn. Sir David


Davidson,James(Aberdeenshire,W.)
Howell, David (Guildford)
Ridley, Hn. Nicholas


d'Avigdor-Goldsmid, Sir Henry
Hunt, John
Ridsdale, Julian


Dean, Paul (Somerset, N.)
Irvine, Bryant Godman (Rye)
Rodgers, Sir John (Sevenoaks)


Digby, Simon Wingfield
Jenkin, Patrick (Woodford)
Rossi, Hugh (Hornsey)


Dodds-Parker, Douglas
Joseph, Rt. Hn. Sir Keith
Royle, Anthony


Doughty, Charles
Kerby, Capt. Henry
Russell, Sir Ronald


Douglas-Home, Rt. Hn. Sir Alec
Kimball, Marcus
Scott, Nicholas


du Cann, Rt. Hn. Edward
Kirk, Peter
Sharples, Richard


Eden, Sir John
Kitson, Timothy
Shaw, Michael (Sc'b'gh &amp; Whitby)


Elliott, R.W.(N'c'tle-upon-Tyne,N.)
Langford-Holt, Sir John
Sinclair, Sir George


Emery, Peter
Legge-Bourke, Sir Harry
Smith, John


Evans, Gwynfor (C'marthen)
Lewis, Kenneth (Rutland)
Steel, David (Roxburgh)


Eyre, Reginald
Lloyd, Rt. Hn. Selwyn (Wirral)
Stodart, Anthony


Fisher, Nigel
Loveys, W. H.
Stoddart-Scott, Col. Sir M. (Ripon)


Fletcher-Cooke, Charles
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Summers, Sir Spencer


Fortescue, Tim
Macleod, Rt. Hn. Iain
Taylor, Sir Charles (Eastbourne)


Foster, Sir John
McMaster, Stanley
Teeling, Sir William


Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Macmillan, Maurice (Farnham)
Thorpe, Rt. Hn. Jeremy


Gibson-Watt, David
Marten, Nell
Turton, Rt. Hn. R. H.


Giles, Rear-Adm. Morgan
Maude, Angus
van Straubenzee, W. R.


Gilmour, Ian (Norfolk, C.)
Mawby, Ray
Vaughan-Morgan, Rt. Hn. Sir John


Glover, Sir Douglas
Maxwell-Hyslop, R. J.
Vickers, Dame Joan


Godber, Rt. Hn. J. B.
Maydon, Lt.-Cmdr. S. L. C.
Wainwright, Richard (Colne Valley)


Goodhew, Victor
Miscampbell, Norman
Walker, Peter (Worcester)


Grant, Anthony
Mitchell, David (Basingstoke)
Walters, Dennis


Grant-Ferris, R.
Monro, Hector
Ward, Dame Irene


Gresham Cooke, R.
More, Jasper
Weatherill, Bernard


Grieve, Percy
Morgan, Geraint (Denbigh)
Webster, David


Griffiths, Eldon (Bury St. Edmunds)
Morrison, Charles (Devizes)
Whitelaw, Rt. Hn. William


Grimond, Rt. Hn. J.
Mott-Radclyffe, Sir Charles
Wills, Sir Gerald (Bridgwater)


Gurden, Harold
Murton, Oscar
Wilson, Geoffrey (Truro)


Hall, John (Wycombe)
Neave, Airey
Winstanley, Dr. M. P.


Hall-Davis, A. G. F.
Noble, Rt. Hn. Michael
Wood, Rt. Hn. Richard


Hamilton, Michael (Salisbury)
Nott, John
Worsley, Marcus


Harrison, Col. Sir Harwood (Eye)
Onslow, Cranley
Wright, E.


Harvie Anderson, Miss
Orr-Ewing, Sir Ian
Wylie, N. R.


Hastings, Stephen
Osborn, John (Hallam)
Younger, Hn. George


Hawkins, Paul
Page, Graham (Crosby)



Heald, Rt. Hn. Sir Lionel
Pardoe, John
TELLERS FOR THE AYES:


Heseltine, Michael
Peel, John
Mr. Goodhart and Mr. Lubbock.




NOES


Abse, Leo
Carmichael, Nell
Faulds, Andrew


Albu, Austen
Castle, Rt. Hn. Barbara
Fernyhough, E.


Allen, Scholefield
Chapman, Donald
Fitt, Gerard (Belfast, W.)


Archer, Peter
Coe, Denis
Fletcher, Raymond (Ilkeston)


Armstrong, Ernest
Coleman, Donald
Fletcher, Ted (Darlington)


Ashley, Jack
Concannon, J. D.
Foot, Sir Dingle (Ipswich)


Atkinson, Norman (Tottenham)
Crawshaw, Richard
Foot, Michael (Ebbw Vale)


Bagier, Gordon A. T.
Crosland, Rt. Hn. Anthony
Ford, Ben


Barnes, Michael
Crossman, Rt. Hn. Richard
Forrester, John


Barnett, Joel
Cullen, Mrs. Alice
Fowler, Gerry


Baxter, William
Dalyell, Tam
Fraser, John (Norwood)


Bellenger, Rt. Hn. F. J.
Darling, Rt. Hn. George
Freeson, Reginald


Benn, Rt. Hn. Anthony Wedgwood
Davidson, Arthur (Accrington)
Gardner, Tony


Bennett, James (G'gow, Bridgeton)
Davies, Dr. Ernest (Stretford)
Ginsburg, David


Bidwell, Sydney
Davies, G. Elfed (Rhondda, E.)
Gourlay, Harry


Bishop, E. S.
Davies, Ednyfed Hudson (Conway)
Greenwood, Rt. Hn. Anthony


Blenkinsop, Arthur
Davies, Harold (Leek)
Gregory, Arnold


Booth, Albert
Davies, Ifor (Gower)
Grey, Charles (Durham)


Boston, Terence
Davies, Robert (Cambridge
Griffiths, David (Rother Valley)


Bottomley, Rt. Hn. Arthur
Delargy, Hugh
Griffiths, Rt. Hn. James (Llanelly)


Bowden, Rt. Hn. Herbert
Dewar, Donald
Griffiths, Will (Exchange)


Boyden, James
Diamond, Rt. Hn. John
Gunter, Rt. Hn. R. J.


Braddock, Mrs. E. M.
Doig, Peter
Hale, Leslie (Oldham, W.)


Bray, Dr. Jeremy
Donnelly, Desmond
Hamling, William


Brooks, Edwin
Dunnett, Jack
Hannan, William


Brown,Bob(N'c'tle-upon-Tyne,W)
Dunwoody, Mrs. Gwyneth (Exeter)
Harper, Joseph


Brown, Rt. Hn. George (Belper)
Eadie, Alex
Harrison, Walter (Wakefield)


Brown, Hugh D. (G'gow, Provan)
Edwards, Robert (Bilston)
Haseldine, Norman


Brown, R. W. (Shoreditch &amp; F'bury)
Edwards, William (Merioneth)
Hattersley, Roy


Buchan, Norman
Ellis, John
Hazell, Bert


Buchanan, Richard (G'gow, Sp'burn)
English, Michael
Healey, Rt. Hn. Denis


Butler, Herbert (Hackney, C.)
Ennals, David
Heffer, Eric S.


Callaghan, Rt. Hn. James
Ensor, David
Herbison, Rt. Hn. Margaret


Cant, R. B.
Evans, Ioan L. (Birm'h'm, yardley)
Horner, John







Houghton, Rt. Hn. Douglas
Mallalieu, E. L. (Brigg)
Rodgers, William (Stockton)


Howarth, Harry (Wellingborough)
Mallalieu,J.P.W.(Huddersfield,E.)
Rogers, George (Kensington, N.)


Howarth, Robert (Bolton, E.)
Marquand, David
Robinson,Rt.Hn.Kenneth(St.P'c'as)


Howell, Denis (Small Heath)
Mason, Roy
Rose, Paul


Howie, W.
Maxwell, Robert
Ross, Rt. Hn. William


Hoy, James
Mellish, Robert
Rowlands, E. (Cardiff, N.)


Huckfield, L.
Mendelson, J. J.
Shaw, Arnold (Ilford, S.)


Hughes, Rt. Hn. Cledwyn (Anglesey)
Millan, Bruce
Shore, Peter (Stepney)


Hughes, Emrys (Ayrshire, S.)
Mitchell, R. C. (S'th'pton, Test)
Short, Rt. Hn. Edward(N'c'tle-u-Tyne)


Hughes, Hector (Aberdeen, N.)
Morgan, Elystan (Cardiganshire)
Short, Mrs. Renée(W'hampton,N.E.)


Hughes, Roy (Newport)
Morris, Alfred (Wythenshawe)
Silkin, Rt. Hn. John (Deptford)


Hunter, Adam
Morris, Charles R. (Openshaw)
Silverman, Julius (Aston)


Hynd, John
Morris, John (Aberavon)
Silverman, Sydney (Nelson)


Irvine, A. J. (Edge Hill)
Moyle, Roland
Skeffington, Arthur


Jackson, Colin (B'h'se &amp; Sponb'gh)
Mulley, Rt. Hn. Frederick
Slater, Joseph


Janner, Sir Barnett
Murray, Albert
Small, William


Jenkins, Hugh (Putney)
Newens, Stan
Snow, Julian


Jenkins, Rt. Hn. Roy (Stechford)
Noel-Baker, Francis (Swindon)
Spriggs, Leslie


Jones, Dan (Burnley)
Norwood, Christopher
Steele, Thomas (Dunbartonshire, W.)


Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Oakes, Gordon
Stewart, Rt. Hn. Michael


Jones, J. Idwal (Wrexham)
Ogden, Eric
Stonehouse, John


Jones, T. A. (Rhondda West)
Oram, Albert E.
Taverne, Dick


Judd, Frank
Orbach, Maurice
Taylor,Edward M.(G'gow,Cathcart)


Kelley, Richard
Orme, Stanley
Thomas, George (Cardiff, w.)


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Oswald, Thomas
Tinn, James


Kerr, Dr. David (W'worth, Central)
Owen, Dr. David (Plymouth, S'tn)
Urwin, T. W.


Kerr, Russell (Feltham)
Page, Derek (King's Lynn)
Varley, Eric G.


Lawson, George
Palmer, Arthur
Wainwright, Edwin (Dearne Valley)


Lee, Rt. Hn. Frederick (Newton)
Pannell, Rt. Hn. Charles
Walden, Brian (All Saints)


Lee, Rt. Hn. Jennie (Cannock)
Park, Trevor
Walker, Harold (Doncaster)


Lestor, Miss Joan
Parkyn, Brian (Bedford)
Watkins, David (Consett)


Lever, Harold (Cheetham)
Pavitt, Laurence
Weitzman, David


Lever, L. M. (Ardwick)
Peart, Rt. Hn. Fred
Wells, William (Walsall, N.)


Lewis, Arthur (W. Ham, N.)
Pentland, Norman
Whitaker, Ben


Lewis, Ron (Carlisle)
Perry, George H. (Nottingham, S.)
White, Mrs. Eirene


Loughlin, Charles
Prentice, Rt. Hn. R. E.
Whitlock, William


Luard, Evan
Price, Christopher (Perry Barr)
Wilkins, W. A.


Lyon, Alexander W. (York)
Price, Thomas (Westhoughton)
Willey, Rt. Hn. Frederick


Lyons, Edward (Bradford, E.)
Price, William (Rugby)
Williams, Alan Lee (Hornchurch)


Mabon, Dr. J. Dickson
Probert, Arthur
Williams, Mrs. Shirley (Hitchin)


MacColl, James
Pursey, Cmdr. Harry
Williams, W. T. (Warrington)


MacDermot, Niall
Rankin, John
Willis, George (Edinburgh, E.)


Macdonald, A. H.
Redhead, Edward
Wilson, Rt. Hn. Harold (Huyton)


McKay, Mrs. Margaret
Rees, Merlyn
Wilson, William (Coventry, S.)


Mackenzie, Gregor (Rutherglen)
Reynolds, G. W.
Winnick, David


Mackie, John
Richard, Ivor
Woodburn, Rt. Hn. A.


Mackintosh, John P.
Roberts, Goronwy (Caernarvon)



Maclennan, Robert
Roberts, Gwilym (Bedfordshire, S.)
TELLERS FOR THE NOES:


MacMillan, Malcolm (Western Isles)
Robinson, W. O. J. (Walth'stow, E.)
Mr. Fitch and Mr. McBride.


McNamara, J. Kevin

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — DECIMAL CURRENCY [MONEY]

Queen's Recommendation having been signified—


Resolved,


That, for the purposes of any Act of the present Session to provide for the introduction of a decimal currency, it is expedient to authorise the payment out of moneys provided by Parliament of the expenses of the Decimal Currency Board to such amount as may be authorised by the Treasury.—[Mr. MacDermot.]

Orders of the Day — PRICES AND INCOMES (NEWS AGENCIES' STAFFS)

9.53 p.m.

Mr. Iain Macleod (Enfield, West): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Temporary Restrictions on Pay Increases (20th July 1966 Levels) (No. 4) Order 1967 (S.I., 1967, No. 217), dated 22nd February, 1967, a copy of which was laid before this House on 22nd February, be annulled.
I feel that I ought to apologise for troubling the House for the third time today, partly on the statement on prices and incomes, then on decimal currency, and now on this Prayer. I am getting in practice for the Finance Bill which lies ahead.
This Order arises out of the 1966 Prices and Incomes Act. We opposed the original Act. We opposed it even more fiercely when Part IV was introduced into it, and consistently and vehemently we have opposed the Orders which have been made under it.

Mr. Stanley Orme: Right hon. and hon. Gentlemen opposite are not the only ones.

Mr. Macleod: Perhaps we are not the only ones, but we are the only ones who voted against them.
In passing, I would say that it is pleasant to be debating this matter with the Parliamentary Secretary. This is the first time that I have had that opportunity. He will know of my affection for his Department. I am bound to say that it is very sad that he has to defend the sort of Motion which comes before the House today.
We had this afternoon from the First Secretary a statement that I found mainly incomprehensible and, where I did understand it, unfair. It has already been savaged in comment, and this Prayer is a very good illustration of what happens when a Government try to intervene in detail in statutory support of their prices and incomes policy. The basic facts are not, I think, in dispute, although it is fair to say—I have seen most of the parties to the dispute—that some of the parties look at some of the facts—naturally enough, perhaps—with a rather different eye.
As I understand the position, it is that the Press Association, Exchange Telegraph and Reuters had an agreement with N.A.T.S.O.P.A., now S.O.G.A.T., which expired on 30th September of last year. The union gave notice of termination of this agreement towards the end of April 1966; that is to say, before 20th July. At a meeting on 3rd November the management and union representatives together agreed on revised terms, which included a minimum increase of 29s. 6d. for employees aged 21 or over, and termination on 31st March, 1968.
In accordance with normal practice, this offer was then submitted to the union executive council, which approved it for membership ballot. The ballot was favourable. There then rose the problem of implementation, and another meeting was held with the union. The union suggested that the management should write to the Ministry saying that the management proposed to implement from 1st January, 1967. The management agreed to do so, and its letter contained these sentences:
We propose to implement this Agreement with effect from 1st January, 1967. Payment will be made under the new Agreement in the week beginning January 23rd unless we hear from you before that date that this is unacceptable.
The letter ended:
A gross anomaly exists as a result of N.G.A."—
that is, the National Graphical Association:
and NUJ employees of"—
the three agencies "—
having received negotiated increases in 1966 on expiry of their two-year agreements while S.O.G.A.T. employees, the lowest paid section "—
and I will return to that point later:
on the expiry of their two-year agreement have not.
The Minister's reply contested the question of whether or not there was a gross anomaly and also whether the question of the criteria of the lowest-paid worker should apply. It ended:
Subject to further consideration … we hope that both parties will meet the wishes of the Government deferring this increase until the 1st July, 1967, at the earliest.
Finally, all three chapels of the B.N.A.—the British News Agencies Association including Reuters, who are not directly affected by this Order—voted to strike


for 24 hours in the first instance. Reuters subsequently withdrew the strike threat—

Mr. Charles Pannell: On a point of order, Mr. Speaker. I am of the opinion that the box on the Liberal bench conflicts with the protocol of this House about bringing cases into this place. I have noticed that previous Speakers have ruled that such things be taken out. Any reflection on the subject would indicate how undesirable this practice is. Once we start we almost have portmanteaus brought in. May I request you to ask Liberal Members to remove the object?

Mr. Speaker: This is a difficult question. I noticed that the hon. Member for Orpington (Mr. Lubbock) brought in a strange contrivance, which, I imagine, contained his speech on decimal currency. That has to go now, unless it is serving some useful purpose.

Mr. Macleod: I was observing that the Reuters strike threat—all three were for 24 hours in the first instance—was withdrawn and the Press Association and the Exchange Telegraph decided to pay from 1st January and the Minister, in retaliation, made this Order. So much for fact, I do not think the facts are in dispute. There may be more facts which one could add, but the basic facts are those.
Now I turn to comment. As I understand the position, of those concerned in these news agencies the highest paid received their 1966 advances just before, indeed one day before, the 20th July statement. They received them on 19th July. Therefore, the lowest-paid workers—this is very ironic—are being affected by this decision. This is why I came to this point as quickly as I could when the statement was made this afternoon by the First Secretary of State and Secretary of State for Economic Affairs. It seems quite clear that the Government have no conception of what a lower-paid or lowest-paid worker is. Perhaps they are waiting once more for Mr. Aubrey Jones, who, I am bound to say, has very odd ideas of a low-paid worker. The higher paid workers got their award and the lowest-paid workers did not. That is what we are debating.
Those affected by paragraph (a) are about 200 in the Press Association. They are copy takers, typists, clerks, librarians, cleaners, maintenance men—those on the lower end of the scale. Paragraph (b) is even more strangely worded. It applies, I believe, to about 100 of a vastly larger number in the Exchange Telegraph and applies only to certain departments. One might ask why these particular departments are selected for mention in this Order. There is no doubt about the answer. It is that these are the departments in which S.O.G.A.T. is so strongly organised.
In all negotiations S.O.G.A.T. has always spoken for all the staff in the Exchange Telegraph and all staff have received whatever increases and improvements the union has achieved for them. But now this Order in Council has been used to differentiate between non-trade unionists and trade unionists. Management is now perfectly free to pay the former any increases it thinks fit. It may be that it will not do so, but who knows with certainty? It is very difficult with individual payments to find out. What is absolutely clear is that S.O.G.A.T. is being penalised by this Government in part, at least, because of the hostile attitude it has taken from the beginning to the Government's prices and wages policy.

Mr. Orme: Is it not a fact that this differentiation whereby trade unionists are to be victimised and non-unionists have the right to payment is the very thing which many of us in this House protested about at the very beginning of this prices and incomes policy, which we are now seeing is the result of Part IV?

Mr. Macleod: Exactly. The hon. Member has anticipated, and perhaps will recall as I read them, the words I used in the debate on the implementation of Part IV. I said on 26th October:
I have one more general point. These particular Orders—this seems to me very curious coming from a Labour Government—affect only union members. Because they affect only union members, there is nothing to prevent non-union members from being paid any increase they can get although doing precisely the same work as those who are controlled. I never expected such a proposition to come from the Socialist Party."—[OFFICIAL REPORT, 26th October, 1966; Vol. c. 865.]
I remember very well Frank Cousins nodding agreement as I spoke those


words. I remember the disagreement which came from the Government Front Bench on this issue.
My first point was in relation to the lower paid. My second point concerns the attitude towards S.O.G.A.T. and the discrimination in relation to the trade unions. One of the trade union leaders came to see me a day or so ago. He started by saying, absolutely fairly, that he was a Socialist but he had come to see me because I had tabled the Prayer. He told me that he was losing some union members who had handed in their cards because of the discrimination this Government are carrying out. Some may rejoice in this, but I do not. I believe that it is absolutely deplorable that the Government should use all their strength in this way to bring about this sort of situation.
Thirdly, there is the case which I mentioned that one of the news agencies—Reuters—although mentioned in the Schedule, is not estopped. The reason given by the Chancellor of the Duchy of Lancaster on Wednesday, 22nd February, to the hon. Member for South-all (Mr. Bidwell), was that Reuters, unlike the others, had not been paying an increase in breach of that standstill. That may be so. It is only fair to say that there are some people who take a somewhat different view of the present situation.
I make it clear that I have no criticism of Reuters, either of the management or of the men. It is perfectly all right to me if they can get the increases. What has happened is that the increases backdated to 1st October, 1966, under a wage structure review have been paid by Reuters. I think I am right in saying that the Ministry, in the last day or so, has given a similar blessing to a move by Exchange Telegraph.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): indicated assent.

Mr. Macleod: The Joint Parliamentary Secretary confirms that that is so.
I put it no higher than this. Some people at least think it is strange that the union which withdrew its strike should have been promptly rewarded. After all, if these increases were not affected by the standstill, why were they not paid

when they were due last October? If they were due, why were they put forward as an alternative to implementing the wage structure which I have discussed? I am sure that the Government take a different view on this. It may be that they have a completely satisfactory answer, at least from their point of view. However, it is right for me to draw the attention of the House to the fact that some disquiet has been expressed on this matter.
I come briefly to my last point—the question of the effect on pensions. I have here the Press Association's announcement to monthly paid S.O.G.A.T. staff. No doubt similar documents could be found for Exchange Telegraph. The point here is extremely important. Pay has been issued to these people at a higher level. The Minister has now ruled that their pay has to go back to the level of 20th July. It therefore follows that their pay has been reduced and that their pension or their liability to pension has also been affected.
The Press Association, very helpfully—I am sure that the others also did this—has suggested:
S.O.G.A.T. staff who are members of the Annuity Fund and within five years of retirement are therefore strongly advised to consider contributing to the Annuity Fund on the basis of their salaries at the rate current for the week ending 25th February, 1967 so that their pension and other benefits will reflect the higher salary they would have continued to receive but for the 'freeze' Order.
In other words, they have a choice—either to pay the appropriate contributions on a salary which they are not getting or to lose part of their pension benefit. I cannot think that the Parliamentary Secretary will not feel ashamed at having to defend that position in this and so many instances.
In due course we shall naturally press this matter to a Division. No doubt, some hon. Members opposite will abstain. I wish that they would do more, but I understand the House of Commons. The rest will support the Government, and they will doubtless be acclaimed as loyalists. In view of the account which I have given, which I do not think can be challenged on any major point, one may well ask, "Loyalty to what?" Loyalty to the doctrine of fairness? But the Order is grossly unfair. Loyalty to the principle of helping the lowest-paid


workers? But it is the lowest-paid workers who are being penalised by the Order. Or, finally, loyalty to trade union principles? But the trade unions are themselves being discriminated against by the Order, which the Government will invite their supporters to support in the House. I am sure that we all really know that, including, I would guess, the Parliamentary Secretary. The Order is shabby. It is in part vindictive, and therefore the House should not tolerate it.

10.12 p.m.

Mr. Sydney Bidwell: As my hon. Friends and, I think, most right hon. and hon. Members opposite realise, I am fairly new to this debating Chamber. But, as many of my hon. Friends also know, I am not new to the trade union movement or the difficulties of negotiating in industrial relations.
It is perhaps an odd situation that on this occasion I find myself substantially in agreement with most of what the right hon. Member for Enfield, West (Mr. Iain Macleod) said, but I am sure that it is not the first time that some very odd or strange bed-fellows have found themselves in the same position of repose. Perhaps I can console myself by thinking that his position is substantially on the right side of the bed and mine is substantially on the left side of it.
The representatives of the workers concerned, members of the Society of Graphical and Allied Trades, came to see me at the House about the problem. Some of them were friends of mine because of a former occupation I followed. When I listened to their case I was very tempted to ask some of my hon. Friends to join me in putting down Prayer to annul the Order, because I felt so incensed at the injustice against these workers. I also thought that the whole case showed up the inadequacies of the Government's prices and incomes policy, as exemplified in the Prices and Incomes Act.
I am therefore very glad today to find that it is substantially going back into the melting pot. It must, because the whole trade union movement is opposed to it in its existing form—not only the whole trade union movement but also, apparently, the chairman of the Labour Party. I think it is obvious that the Opposition, in bringing this case forward this evening, are shedding a lot of croco-

dile tears about the rights of trade unionists. Nevertheless, I feel that it is my duty, and that of many of my hon. Friends who think as I do, to take advantage of this opportunity to give the retreating aspect of the Government's incomes policy a further shove.
It is true, as the right hon. Gentleman said, that after I had heard of this case I put down a Question to the First Secretary of State asking him not to make an Order. His reply was that an Order had been made restricting the remuneration of certain employees of the Press Association Limited and the Exchange Telegraph Company Limited to what they were receiving before 20th July, 1966. He did not make an Order in respect of Reuters Limited because that company, unlike the others, had not been paying an increase in breach of the standstill. I heard a little about the history of this, and it smacks very much of victimisation, because I understand the situation to be that other employees have had increases, or have been promised them, back-dated to last April.
There is an enormous amount of overlapping of the work between Reuters employees, Press Association employees, and Exchange Telegraph employees. I am not surprised, therefore that the S.O.G.A.T. branch issued a statement in which it said that it considered the Order in Council, if operated, would put their wages back to a level which was unjust and unprincipled, particularly in view of the fact that S.O.G.A.T. catered for the low-paid workers and prior to the freeze there had been increases made—I understand substantial increases—to members of the National Union of Journalists and to members of the National Graphical Association who are higher-paid workers in the print industry.
They said it was unjust because it would merely increase the already substantial difference in wages between themselves, the lower-paid section of the staff, and the rest of the employees, and that the Order would apply to one-third of the staff, and that one-third would be the lowest-paid.
Members of S.O.G.A.T. on whom the Order in Council is imposed also negotiated a wage increase in 1966, but it could not be paid because of the standstill. The new but frozen agreement contained a wage increase of £1 9s. 6d.


a week on the basic rate of £14 12s. 6d. established in October, 1964, and the Order in Council if applied means that the S.O.G.A.T. members alone among employees of the three news agencies, the Press Association, Exchange Telegraph and Reuters did not have an increase in wages for almost three years.
They said that the Order was unjust because it discriminated against the lower paid. Many of the workers were lower paid according to the figures which I have mentioned, and they also said that it was unprincipled for the following reasons, namely, that all three associations had negotiated an increase, that the S.O.G.A.T. agreement was for an increase of £1 9s. 6d., that the Order was to apply only to S.O.G.A.T. members of the Press Association, to some members of the Exchange Telegraph Company, and that it did not apply at all to members employed by Reuters.
S.O.G.A.T. chapels in the Press Association and Exchange Telegraph Company pressed for the implementation of the agreement, and after strike notices had been handed in the managements of these two agencies agreed to implement the increase with effect from 1st January, 1967. Reuters' chapel withdrew their strike notice under duress, and as a result the new agreement was not implemented in Reuters. The Order in Council did not affect them later on. However, the management of Reuters had informed the employees that the Minister had agreed that the cost-of-living bonus should be paid in April, 1967. I understand that it has been, or will be, back-dated to October of last year. We are now left with the position that S.O.G.A.T. members on Exchange Telegraph and the Press Association do not know exactly where they stand, because in the freeze their cost-of-living bonus has already been included, and so other groups of workers are going forward.
Another point which puzzles them is that apparently the Order was applied to departments where S.O.G.A.T. members were employed, and it is common gossip that a number of other employees, who were not caught up in collective bargaining arrangements, have had increases in emoluments in some way or another.
The situation in Exchange Telegraph is extremely confusing. The Order in Council applies only to specific depart-

ments and, oddly enough, those are the departments organised by S.O.G.A.T., says the statement. The departments which are excluded from the Order are non-trade union organised and it is therefore concluded that the Order in Council is specifically designed to discriminate against trade unionists in the Exchange Telegraph. For all these reasons it is considered that the Order in Council should be annulled by Parliament as unjust and unprincipled.
In listening to these representations I could not find an argument to suggest that the Order was not unjust and unprincipled. This kind of thing is one of the most glaring examples of the many injustices which are obviously coming out of what is not really a prices and incomes policy, but a groping towards such a policy, forced upon the Labour Government, some may argue.
I will give another example of the way in which the workers feel about it. In a letter addressed to one of the officials of S.O.G.A.T., the father of the chapel concerned said:
Upon looking at the Order in Council that you sent us, my committee wishes me to put on record to you and to the Executive Council the following comments.
That in naming certain departments this order has discriminated between union and non-union personnel at Extel House. This discrimination could have a very bad effect on the morale of this Chapel once the order takes effect, unless the reference to departments is deleted.
In their deliberations with the Ministry, the Extel Management have indicated departments in which our members work. However, we do have members in other departments, and had we been involved in a prolonged dispute these members would have been affected. How would the Order have been applied then? The Order appears to us to lack both principle and common sense.
The action our Chapel threatened to take, despite the various labels attached to it, was solely to back our Union, and actively support its policy regarding the wage freeze. This was done in spite of thinly-veiled hints from the Management that other workers, presumably non-union, would go ahead of us financially. We therefore look to our Society to do all they possibly can on our behalf.
I do not envy the Parliamentary Secretary his job this evening, because he will be defending what I consider to be a crumbling policy. I have listened carefully to many of the other discussions on wages Orders. In his speech concluding the debate on the last occasion, my hon. Friend referred to Mr. Frank


Cousins, the former right hon. Member for Nuneaton and the general secretary of the union which, incidentally, is the landlord of the headquarters of the Labour Party. He took as his norm £15 a week for the low-paid or lowest-paid worker—we get rather confused with these terms.
Some of the workers concerned in this case earn about £11 a week. On this occasion I would like my hon. Friend to throw away his brief. He is a fellow trade unionist and I would like him to attach his mind very closely to the substance of what is said in the debate. He said on one occasion, in answer to a critic, that the Government should have an incomes policy but it should allow people to break it. Of course it has been broken. He has talked about drawing a line but there is no line. There was free talk about criteria. What do the criteria mean? A criterion is an assessment of judgment, but there has been no fair and just application of the incomes policy up to date.

Mr. Speaker: Order. I want to help the hon. Gentleman. He cannot discuss the incomes policy in general. What he must do is apply it to this Order.

Mr. Bidwell: It is very tempting to want to do that, especially when the White Paper has just been published. This particular case is a glaring example of what can follow in the wake of the legislation. My hon. Friend the Member for Putney (Mr. Hugh Jenkins) talked, on the last occasion, in terms of the three principal Ministers concerned charging about in the delicate china shop of industrial relations. That very aptly sums up the situation.
It has not been a hit-and-miss policy in my view; it has been a hit-and-mess policy. It has shown up hideous deformities, assuming of course that we had a correct distribution of the national income to begin with. No more glaringly than in this particular case are the inadequacies of the whole policy exposed.

10.26 p.m.

Sir Lionel Heald: I am glad to be following the hon. Gentleman the Member for Southall (Mr. Bidwell), because I believe that this is a matter which should be discussed, as he has made quite plain he was discussing it.

from a non-party point of view, but from the point of view of understanding what is the effect of an Order on this kind upon our constituents. We ought to recognise that this is a case where there was an agreement freely entered into by independent parties, involving an increase in their remuneration. We are interfering with that if we agree with the Order that we are now considering. We ought to know what that involves.
There are several matters upon which I believe the House is entitled to have an explanation, arising out of the White Paper issued today. We are surely entitled to know, if this Order is effective, what will be the future position. What will happen in July? I am very concerned, having had the opportunity of reading the White Paper since it was produced at 3.30 p.m. this afternoon, and considering it in relation to what we are discussing now. On the face of it, it would appear that in July this agreement will be allowed to go forward. I am relying here upon paragraph 25 of the White Paper which says:
Commitments, the operative dates of which have been deferred 'at least until 1st July' … may be implemented from that day, unless the parties concerned agreed on a later operative date or the commitment is … the subject of a reference to the National Board for Prices and Incomes …
On the face of it, that sounds very attractive, but when we look back at the previous paragraph, we begin to wonder what the situation will be. A little earlier in the White Paper we find the statement that:
In the present economic situation … There can be no justification …for returning to the norm of 3–3½ per cent. per annum. Over the twelve months' period beginning 1st July, 1967, no-one can be entitled to a minimum increase;"—

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I must point out to the hon. Gentleman that he cannot discuss the White Paper. He must discuss the Order before us, relating to one particular case.

Sir L. Heald: I am giving reasons why we should not agree to this Order. The first reason is that unless we have an explanation of the effect of the Order on the future of these men under their agreement, which they have entered into according to law, we cannot make up our minds except in one direction, and


that is to refuse it. [Interruption.] Of course, there are some people who do not like the law, except when it is in their favour, but in this case, as the hon. Member for Southall has pointed out, there is a serious question as to whether injustice is being done to these men. That is what I am concerned with. I take it that the hon. Member and I will be in agreement.
I was not being legalistic but was being very practical about this. We want to know whether these men, if they cannot get this increase today, will be entitled to get it in August. I am very doubtful whether they will, and I will explain why. Unless we are satisfied that that is so, I believe that hon. Members in all parts of the House will be very anxious to know exactly where we are going. How long are these men to be deprived of their rights under a legal agreement?
This is what is said, and I will be short about it:
Over the twelve months' period beginning 1st July 1967, no one can be entitled to a minimum increase; any proposed increase … will need to be justified against the criteria set out below.
That means, apparently, that steps will be taken to see not only that they do not get the increase now, but that they will not get it then either.
Paragraph 23 of this wonderful document which was produced this afternoon refers to the
Report on Incomes Policy which was approved by the Conference of Union Executives",
when
the T.U.C. General Council stated that priority should continue to be given to encouraging settlements which promote productivity and to improving the relative position of low-paid workers. The Government accept the desirability of maintaining these priorities …
When we look at the "Descriptions of Remuneration for Work" in the Schedule to the Order, we find that specific reference is made to doorkeepers, storekeepers and handymen, editorial and sports services, sports room, and so on. Can it be said that we know where we stand with regard to that matter?
We are being left in a state of great confusion on this matter. It is bad enough when men who are admittedly holding down the jobs which they are doing well and are classed very much

as lower-paid workers are told that their agreement is not to be honoured today; but not to know where they will stand in July or for another six months or year is utterly wrong.
I do not want to pursue this matter further, but I suggest that we in the House of Commons tonight should realise that a statement was made in the House this afternoon without our having had an opportunity of reading the White Paper. We have now had an opportunity of looking at it, and this evening we begin to see the first signs of what it will mean. We ought to demand very careful consideration of the whole subject before we go any further.

10.33 p.m.

Mr. Stanley Orme: I want to deal with the central theme arising from the Order. This is about the eighteenth Order to be made under Part IV of the Act. The number is considerable. This is what many of us said would happen: once we embark on the policy of legislation, there is no end to it.
We can chart the passage. In recent times we have gone through the cases of the Denby Pottery workers and the limb-fitters, and now we have arrived at the P.A. We must be at the bottom of the pit in the Government's policy on Part IV. This is a mess of pottage, and this Order is one of the worst that the Government have introduced.
It is ironic that I should sit on this side of the House and hear the right hon. Member for Enfield, West (Mr. Iain Macleod) make the case for trade unionists as opposed to non-unionists while my right hon. and hon. Friends sit mute on the Front Bench. I never thought we would see the day when a Labour Government would bring forward legislation which made it possible for non-unionists to be awarded an increase whilst trade unionists were denied it. The case against the Order has been explicitly laid out by hon. Members opposite and by my hon. Friend the Member for Southall (Mr. Bidwell). The facts are not in dispute. I should like to know whether certain offices have been included in or excluded from the Order. Is it a fact that non-unionists have been paid this increase and that S.O.G.A.T. members have been denied it? We are entitled to an answer from the Minister.
The implementation of the prices and incomes policy has led us down the road where we chase a few innocent people—worthy citizens, who are producing the wealth of this country. They are being chased from pillar to post by the Government, who are seeking to justify a prices and incomes policy which has now been discredited in the eyes of the country. The publication of the new White Paper today is an indication that we are getting towards the end of the line.
Bringing forward Orders like this to try to plug a hole here and there in the prices and incomes policy reminds me of the story of the little Dutch boy sticking his finger in the wall of the dyke to try to stop the water coming through. In the end the water did come through. It is all very well for the Minister to laugh. He sees the matter very superficially. Those of us who have worked and lived in the trade union movement, however, regard the position as far more serious.
This Order is one cardinal error in a number of false steps taken in implementation of the prices and incomes policy, and I shall not be able to support it in the Lobby. The right hon. Gentleman has said that we can abstain. Of course, we will abstain. The right hon. Gentleman knows the situation. We are seeking to make known to our Government by the strongest means in our power the fact that we are opposed to this policy. We believe it to be utterly wrong. Whatever hon. Members opposite may preach about this tonight, I have not seen them summon up the courage to vote in our Lobby very often.

Mr. Andrew Faulds: If my hon. Friend is opposed to the policy of the Government let him follow the logic of his views and vote with the Opposition—if he has the guts. Do not let him pretend that he cannot, and water down his action.

Mr. Orme: I do not want the advice of a paper tiger on my side of the House. My stand and convictions on this are well-known.
The Government should recognise the folly of this policy—

Mr. Deputy Speaker: Order. The hon. Gentleman is getting into a broad debate on the Government's prices and incomes

policy, which he cannot do on this Order. I am afraid that he must concern himself with the steps leading up to the Order.

Mr. Orme: I am sorry, Mr. Deputy Speaker; when I said "this policy", I meant "this Order".
These Orders are causing grave concern among a section of the community upon whom we will call to give increased productivity for the wealth of the nation to create the social services which we on this side want. The Government ought to drop the Order. My hon. Friend ought to recognise the strength of the case against it. This would be a Gilbertian situation, if it were not for the fact that it is no laughing matter for the people involved.
I say to my hon. Friend as one trade unionist to another—I will not mention his union, because his general secretary is Mr. Clive Jenkins—that the Order is an indication of where we have arrived. I ask the Government, even at this late hour, to withdraw it.

10.42 p.m.

Mr. F. A. Burden: The attacks from the Government benches are becoming more vitriolic with each Order that we discuss. The Parliamentary Secretary must have some disfavour for his duties here on these occasions—

Mr. Hattersley: indicated dissent.

Mr. Burden: I should have thought that he would agree, because he cannot be pleased at his hon. Friends' reactions. If he had to justify the action which he will take tonight before his general secretary, Mr. Clive Jenkins, he would need pep pills or a bromide.
One of the worst charges against the Government is that there is victimisation of members of S.O.G.A.T. because of the power of the union. It seems that the 18 Orders which have come before us—one wonders how many more will be, are directed at trade unionists. Small firms in which there are no trade unionists or very few are paying their workers higher wages and getting away with it. Hon. Members opposite have said that the Order is unjust and unprincipled and the Parliamentary Secretary must answer this charge from his own back benchers. This is the depth and strength of the charge. I hope that he will take it seriously and do his best to justify the


Order, in view of the very strong words which have been used.
Looking at the Order, one cannot help seeing that among those who are to be denied any increase are doorkeepers and cleaners. The Government have always stated that they wish to see that the lowest paid workers still get some increase, despite the freeze, but in this Order the lowest-paid workers have been denied it.
We know that the average wage is £20 a week. If the hon. Gentleman understands this Order and its effect, surely he will be able to tell us what are the wages of the doorkeepers and cleaners who have been refused an increase. We should like to know whether they are the lowest-paid workers or lower-paid workers. How do their present wages compare with the national average?
I hope that the hon. Gentleman will be able to give me the answer tonight. I asked him a similar question when we debated the last Order, but, either because of pressure of time or because he did not know, he did not give me the answer—[Interruption.] Well, I hope that he will be able to give me the answer tonight.
We find also that handymen are included specifically in the Order. What are their wages? I suggest that they are not among the lower-paid workers, but among the lowest-paid workers. It is not surprising that we hear from hon. Members opposite that some of these men are being victimised—and I use the word now. Agreements have been entered into, and, in Order after Order, the Government are refusing to allow firms to honour the agreements which they have reached with trade unions. It is not surprising that the unions are losing members.
An extraordinary position has arisen out of the Government's policy. They represent a movement which grew to power from the strength of trade union support; yet here they are penalising the members of the unions on which they have relied in the past, while non-members are getting increases, and the Parliamentary Secretary knows it.
He has a great deal to do to justify this Order. I wish him luck, not only in the House but in the eyes of trade unionists in the country as well.

10.48 p.m.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): I endorse and agree with all the chronology and detail outlined with characteristic moderation by the right hon. Member for Enfield, West (Mr. Iain Macleod).
Having agreed that the historical facts were right as set out by him, I must clarify one point. The initial error was his, but it was repeated and compounded by my hon. Friend the Member for Sal-ford, West (Mr. Orme) and the hon. Member for Gillingham (Mr. Burden). It is the simple but crucial fact of the people to whom the Order applies in two senses: first, whom it applies to within the establishments under consideration, and, second, why those establishments or parts of them appear in the Order.
As to the first of those senses, anyone who has read the Schedule and followed recent debates will understand how wrong it is to suggest, as was implied by the right hon. Gentleman and stated by my hon. Friend, that a trade unionist doing the same job as a non-trade unionist in the same firm, at the same bench and under the same conditions, would somehow be discriminated against.
The Schedule is quite specific. It applies to anyone who is "expressly or by implication" covered by the terms of the agreement between managements and unions. Of course, as my hon. Friend the Member for Salford, West said, it is in the nature of agreements that they are made between trade unions and managements. But the Order is quite specific in that it stipulates that its application is equal both to those members of the trade union who have an agreement signed on their behalf by their national negotiating body and those other employees in the firm who are equally covered by the agreement which the trade union has itself signed.
It is absurd to suggest, as the right hon. Gentleman did, that there is more benefit financially not to be in the union; that there is some benefit, some financial advantage in handing in one's union card, in that to do so entitles one to a wage increase. Of course it does not. When the right hon. Gentleman says that he had an application from a man who asked him, "How am I to advise my


members who say that they wish to resign from the union because of the Order?". I have to tell the right hon. Gentleman that the advice he must give is quite clear. It is that the union representative or the shop steward must tell his members: "Resigning from the union does not entitle you to a financial increase." To do that gives no financial increase because the Order applies to everyone working under the agreement as outlined, and proposed for implementation on 22nd December.

Mr. Orme: What I was saying was not that men doing similar jobs were being victimised in relation to this, but that certain offices or departments which were organised under S.O.G.A.T. were held up under this Order but that other offices and departments that are perhaps not organised, not doing the same work, are excluded from the Order.

Mr. Hattersley: That takes me naturally to the second problem of definition which I said at the beginning I would make—why the two agencies are chosen for the Order, and why part of one of them is stipulated in the Schedule to the Order. The answer is quite simple and straightforward, and in no way sinister. The Order is made against those establishments, and those parts of those establishments which propose to break the line of the prices and incomes policy. The Government did not make the Order apply to people who were not proposing to accept that offer of a wage increase that was outside Government policy—[Interruption.] I do not understand the cause of the hilarity amongst my hon. Friends.
I do not know whether they are indicating that the Government should make Orders against people who have no proposal for a wage increase, or indicating that other departments, other firms, have implemented wage increases and have not had Orders made against them. If it is the second case, I can give them a categorical and absolute assurance that that is not so. Whether by voluntary agreement, which is by far the most preferable course, or by the working of the Order on employees in their establishments, the employees of the Press Association, Exchange Telegraph and Reuters are now receiving remuneration totally in line with

the proposals in the Government's prices and incomes policy—

Mr. Burden: Is the Parliamentary Secretary really suggesting that there are not a great number of small companies which have given wage increases which have never been made the subject of an Order yet, and are unlikely to be? And is it not the fact that when other wage increases have been agreed there will not be anything that comes under the Order at all?

Mr. Hattersley: The hon. Gentleman keeps on asking me to give answers to questions he has not asked in the first place. If he is saying that people are receiving wages in excess of the prices and incomes policy, it is absolutely wrong. If he says that other firms are breaking the line of the incomes policy, I must say to him, as I must say to others of his hon. Friends, that they must produce some evidence to suggest that. When the evidence has been produced—and I quote again the much-discussed and argued case of Acrow, and cases that have been listed in the journal of my trade union—when actual instances are examined by my Department, it almost invariably suggests that, in fact, they do not break the line of the prices and incomes policy criteria.
Let us go back to the chronology of the case, to the facts as outlined by—

Mr. John Biffen: The hon. Gentleman speaks with great confidence on this matter. But is he confident that every increase that has been paid to a systems analysts or a computer programmer has been authorised by his Department and that no such increases have taken place without his knowledge?

Mr. Hattersley: Of course, I do not make such an absolute conjecture, but I see the world in rather less absolute terms than the hon. Gentleman. I am saying that by and large the country voluntarily accepted the prices and incomes policy and those who have not accepted it have been caught by an Order. Every week the hon. Gentleman makes some unsubstantiated comments and believes, although he has produced no evidence, that he has scored a point. It will not do.
The right hon. Member for Enfield, West said rightly that the important date,


the significant and fundamental date concerning the new agreement, was 22nd December. That was when the union and at least two of the managements came to the agreement on payment at the new rate. It is a significant date because it is a month after the publication of the White Paper on the Period of Severe Restraint and five months after the publication of the White Paper on the Standstill.
There is, therefore, no question that this trade union, a national union, strongly led and well-informed, had any doubt that the agreement signed on 22nd December would be in contravention of the prices and incomes policy, if it were paid on the date it originally suggested, 1st January. The union was deciding, overtly and formally, with all the information at its disposal, that it would ignore the prices and incomes policy as laid down by two Government White Papers.
Presented with that situation, the Government had to decide between three alternatives. The first is no doubt the one that would have been commended by the hon. Member for Oswestry (Mr. Biffen), that is, to abandon the incomes policy altogether. But I understand that it is not the one that would have been commended by the right hon. Member for Enfield, West.
The second alternative was to say, "We stick by the prices and incomes policy, but not for the militants. We have prices and incomes policy for those who agree, for those who comply, but when a union like this chooses to stand out against us prices and incomes policy can be breached for it."
The third alternative, which the Government rightly chose, was that incomes policy required that the line be held, that breaches should be resisted, and we put into operation the powers at our disposal to make sure that breaches were resisted.
It is significant in that situation to analyse the attitudes of the three managements. All three understood perfectly well, as did the union, that to pay the increases on 1st January was in direct contradiction of the Government's incomes policy. All three managements consulted my Ministry and were advised by my right hon. Friend that the proper

course was to defer the increases until the end of the period of severe restraint. All three managements reported to their workers that that was the course that they intended to adopt.
The Press Association was immediately threatened with a strike on 3rd February, which would have been particularly damaging to it. As a result, it felt that it had to agree to pay the increases on 13th February, back-dated to 1st January. The Exchange Telegraph felt that it too had to break the incomes policy and pay increases from 1st January.
Reuters, threatened with a strike on 8th February, chose not to pay the extra 10 per cent. It has had no strike, and there has been no Order, because the Reuters management and workers are voluntarily observing the prices and incomes policy. That proves, first, the nature of the management, secondly, the wisdom of the union in that concern, and, thirdly—and perhaps most important—the virtues and values of having a cooling-off period during which both parties can consider whether they want to proceed in a head-on collision with the Government over prices and incomes policy.
The other two institutions decided that in the face of a strike threat they had, in their own commercial interests, to offer the wage increase, at a time which was totally unacceptable to the Government. For this reason the Section 29 Order under Part IV of the Act was made, including—and I emphasise, and re-emphasise this—those sections of both the Exchange Telegraph and the Press Association where there was, or was to be, a breach, excluding no one who would have made the breach, excluding no one who would have received an increase which was in excess of the terms of the Government's prices and incomes policy.
As I repeat most weeks on one of these Prayers, the Government's duty before they make such an Order is to make sure that an increase cannot be substantiated, cannot be defended, cannot be approved, even within the terms of the Government's prices and incomes policy.
Fundamentally, the point to consider in this regard is the one suggested by the right hon. Member for Enfield, West, namely, the criterion which decides whether or not a gross anomaly justifies a


wage increase in excess of the general stipulations of Government policy. It is extraordinary for the right hon. Gentleman to suggest that the case in question was a gross anomaly.
The case in question was one in which traditional differentials had, over six to seven months, been broken. I do not believe that on reflection the right hon. Gentleman, many of whose views on British management are progressive, will go to the stake tonight, or on any other occasion, to defend the traditional level of differentials in British industry.

Mr. Iain Macleod: With respect to the hon. Gentleman, he is, as he was earlier, on an entirely false point. The phrase "a gross anomaly" exists in this case. It was not invented by me tonight. It was put to the hon. Gentleman in the letter which came from the management with the union's consent. It is not an invention of mine. It is the opinion of both management and trade union, but it is my opinion as well.

Mr. Hattersley: I do not understand the point which the right hon. Gentleman is making. He is saying that his opinion, which is totally false, totally insupportable, and in favour of nothing other than supporting traditional differentials, is the point of view of the trade unions involved. I am sure that it is. But it does not make it more right, more logical, or more desirable. The right hon. Gentleman offered that as one reason why the wage increase should have been allowed to go forward. I am saying that to interpret the phrase "gross anomaly" as something which is no more than a temporary destruction of traditional differentials is to misunderstand many of the problems of British industry in 1967.
I turn now to the other criterion which might have entitled this claim to be taken and paid and allowed to go forward. This is the requirement to consider whether or not the workers in this industry were lowest-paid workers. I hope that the hon. Member for Gillingham (Mr. Burden) will listen to my figure with great care. He is right in saying that he asked the same question last week. He is wrong in saying that he did not get an answer. He received answers of enormous complexity giving him

seasonal variations as well as flat figures, and if he checks in HANSARD he will see that to be the case. Let him therefore listen to the figures in this respect.
The old agreement entitled men to a minimum of £15 a week, rising after five years to £16—

Mr. Burden: I did not ask about general wages. I asked the hon. Gentleman to quote the wages of doorkeepers, cleaners, and handymen.

Mr. Hattersley: The hon. Gentleman must contain himself. I shall come to all these things. The old agreement was for a minimum of £15 a week, rising to £16 10s. in five years. The hon. Gentleman must understand that minimum is a minimum. This is at least what the men were getting, irrespective of the nature of the work. They were getting a minimum of £15 a week. I repeat what I said a week ago, that all the criteria for the lowest-paid workers which have been presented to us from sources which do not agree on many things, from sources whose views on the prices and incomes policy are very different—some supporting the policy and some rejecting it—suggest that £15 a week certainly does not, by any reasonable term, qualify as a "lowest-paid worker". Certainly not when the average earnings in the industry are £3 or £4 more than that, making the figure more like £18 a week. Certainly not when the suggested increase on the average of £18 is as much as 10 per cent. It would be fatuous to suggest that men of this sort can, in the terms of a redistributive prices and incomes policy, be regarded as the lowest-paid workers.
I turn to the fourth question of substance which the Government have been asked this evening, that concerning the nature of other increases which have been paid notwithstanding the Order. The right hon. Member for Enfield, West asked about the increases, either incremental or cost of living, for both are affected, which might have been paid in October, 1966, and which in the case of Reuters have been allowed for April, 1967. The right hon. Gentleman asked why, if the men concerned were entitled to this increase, they did not get it in October. I know that the right hon. Gentleman does not agree with the incomes policy, but I am entitled to ask


him to read it. The answer is clear and certain. Existing commitments entered into before 20th July, 1966, come to be paid, within the terms of the incomes policy, six months after the operative date. As I add it up, April, 1967, is six months after October, 1966, and that increase is consistent with our concept of and proposals for the incomes policy.
Reuters are receiving the increases, both incremental and cost of living, for the simple reason that in the absence of a Part IV Order and in the absence of their agreement to the new proposals of 22nd December, Reuters are operating under the old agreement, the pre-July 20th agreement, which included stipulated commitments, tight commitments, precise commitments, enabling Reuters, under the terms of the incomes policy, to give increases six months after the operative date.
All the "concessions" which have been made to Reuters are not concessions at all. They are simply agreements which the incomes policy says they may have, and I want to make it quite clear to the House this evening that the same concession, if "concession" is the right word, the same agreement, is available to Exchange Telegraph and the Press Association.
In the view of the Ministry of Labour, the result of the Part IV Order is to have these two establishments working at least on the terms of the old agreement, the pre-July 20th agreement, and the terms of the old agreement stipulate incremental increases for men in their first five years of work, or for men from their first day of employment to their 21st birthdays. The prices and incomes policy makes it clear and precise that that sort of fixed incremental increase is acceptable to the Government. We make quite clear that this sort of increase entered into and agreed before 20th July, with an operative date some time after that, may be paid six months after the original date for payment. If the Exchange Telegraph owners, or the Press Association owners, or the unions at either of those establishments, wish to have from my right hon. Friend a written assurance that the benefits and increases to which they were and are still entitled under the pre-July agreement can be paid, then that offer is certainly open to them.
I emphasise this evening, as I have emphasised on the other five occasions since Christmas when we have made Prices and Incomes Orders, that it is not the intention to penalise the unions, to pick them out for specially unpleasant treatment. We are simply saying that they must hold the line of the incomes policy, for there is certainly no question of a legalistic interpretation which deprives the men who were the subject of a Part IV Order of the benefits which they would have legitimately received if they had chosen the voluntary rather than the compulsory path.
We are clearly aware that the majority of the country continues to choose the voluntary path and that the majority of the country is prepared to co-operate with the Government in voluntarily limiting wages. All the figures suggest that. All the figures suggest that it is not what the hon. Member for Worthing (Mr. Higgins) suggested that it was a week ago—simply a matter of deflation. Comparing this period with other periods, all the figures suggest that a voluntary incomes policy, with the overwhelming co-operation and compliance of the majority of the country, has been a material factor in keeping costs and the wages bill low.
Clearly, the Government treat it as their duty to make sure that the minority, who are not prepared to accept this voluntary principle, accept it in the interests of the community. We do not see it as our policy or duty to impose on them obligations and penalties which they would not have undergone had they taken the voluntary course first of all. We are therefore offering to the union all the benefits which it would have received had it gone on with the voluntary scheme rather than compelled us to make a Part IV Order. We are saying to it, as to other unions, that during this period holding the line of prices and incomes policy is essential to the economic well-being of the country.
I say to the House that holding the line in this case is a more straightforward example of the need for a Government policy than other Orders which we have had in the last few months. We are faced with a union which knew that it was breaking the incomes policy, and chose to do so. We are faced with a


union which was well paid, but nevertheless was insisting on pushing its way to the head of the queue. We are faced with a union which has challenged the Government's prices and incomes policy, and whose challenge must be resisted, not because we object to the challenge, but because the policy is in the interests of the welfare of the nation.

11.12 p.m.

Mr. Charles Fletcher-Cooke: The Joint Parliamentary Secretary has not begun to answer the questions put by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald). These may be legal questions, they may be legalistic questions, but the Government have chosen to take up the weapon of the law, and they must wield it with precision. If they take up this sword, they must be careful not to perish by it.
The question put by my right hon. and learned Friend was: what is the effect of this Order when the parent Act expires? There are three possibilities. I put the question of the Denby Order, and he said that he did not choose to answer until the Government made its intentions for the future clear. The Government have now made their intentions fairly clear about the future, but the hon. Gentleman still refuses to answer about this Order that we are debating. I do not see why either the men or the management should have this Order made upon them until the Government make clear what the effect will be when it the parent Act expires.
There are three possibilities. The first possibility, when it expires, is that the men will be entitled to the back payments from the date of the agreement, or the date when the Order bites. Is that right? If it is, it means that the management ought to put this money into a blocked account which ought not to be distributed in dividends or put into a profit and loss account in the general way. It ought to be put into a blocked account and the men will know that they will receive it.
The second possibility is that when the Order expires, as a result of the expiration of the parent Act, these contractual agreements are automatically paid, without restrospection, that is, they

will be payable from 20th July or 1st August, or whatever is the correct date, without more ado. Is that the view of the Government? If it is correct, there again, people will wish to make their dispositions accordingly.
The third possibility is that this agreement, which was freely entered into in December, is killed for good by this Order, when the Act expires, and is not revived by its expiration, and a new agreement will have to be negotiated, presumably within the terms of the new White Paper. These are very important questions for the persons concerned, and not a single syllable has been given in reply, in spite of the fact that the Government have now made up their mind.
I hope that the Joint Parliamentary Secretary will ask your leave, Mr. Deputy Speaker, to answer these questions because it is ridiculous, and contemptuous towards the people who are concerned with an Order naming certain persons in certain departments—a very specific Order—that they should not know where they stand when the Order expires. There are three totally different possibilities, and no explanation has been given by the Parliamentary Secretary, either because he does not know or because he dare not say.

11.15 p.m.

Mr. Eric S. Heffer: I am sure that we all listened very carefully to the speech by my hon. Friend the Joint Parliamentary Secretary. I am also sure that when we heard it, we realised even more clearly than before precisely how unfair this Order is. However, I will go into that in a little more detail later.
The statement of the Press Association chapel makes it quite clear that the members of the National Union of Journalists and of the National Graphical Association, who are the higher paid members of the staff, negotiated and received increases in wages during 1966 just prior to the imposition of the wages standstill in July of that year.
My hon. Friend the Parliamentary Secretary made great play of what he called traditional differentials. If it is true—and I am accepting the view of the unions—that the higher paid section of the workers in this job have received


an increase in pay, then it is not a question of keeping the traditional differentials. It is a question of expanding the differentials and making the position much worse than it was before. We made it quite clear that the application of the Government's incomes policy was grossly unfair and this, in my opinion, is a first-class example of its unfairness.
Then we are told, "If only they had accepted the old agreement, they would get a certain increase now, that this is in line with what they would get under the old agreement, and it is perfectly possible to pay this; but because they had negotiated a new agreement, arrived at by proper negotiation between the employers and the trade unions, which was then caught in the wages standstill, they cannot have the increase." I have never heard a more utterly ridiculous argument in all my life. I should like my hon. Friend to go along to the trade unionists in that shop and explain the situation to them. I am sure that he would be sympathetically received by the workers, who would understand the circumstances very well! It is too ridiculous for words, and I do not think we ought to be expected to listen to this sort of thing.
I want now to come to the question whether this Order operates for the trade unionists or the non-trade unionists. Again, we can only be guided by what the trade unionists say. They say that the situation in the Exchange Telegraph is extremely confusing. They say that the Order in Council in the case of the Exchange Telegraph applies only to specific departments and, oddly enough, these are the departments which are organised by S.O.G.A.T. The departments which are excluded from the Order are unorganised and non-trade unionist. This is a very clear statement by the trade union involved. They say, "Can you understand"—I can—"why the workers in the trade unions say 'It is discrimination against us'?"
The Parliamentary Secretary's answers are not satisfactory. We have been told that the mass of the trade unions accept this voluntary principle. We are told that they are all happy about it and that the workers in the country are delighted, quite voluntarily, to accept the wage freeze. I have yet to find these

workers who are delighted to accept the wage freeze.
But let us for a few moments examine the word "voluntarily". The Government introduce a Bill which contains certain penal Clauses. It is like pointing a pistol at someone's head and saying, "Sweep that floor. If you don't, I will shoot you". He replies, "Right you are"—and does it. Afterwards, we are told that he did it quite voluntarily.
When we talk about what is voluntary and what is not voluntary, let us get this clear. This policy has nothing to do with voluntary acceptance. It is a decision of the Government. If the workers had carried out their opposition and gone on strike, the penal Clauses in Part IV would have come into operation. Perhaps the trade unionists should have challenged it. That is a matter for them.
It is quite clear that the whole of this prices and incomes policy, of which this Order is a part, has reached a situation in which the entire trade union movement, through the Trades Union Congress, have said, "No more. If we are to have an incomes policy, we will administer it ourselves".
This is an example of the bankruptcy of this particular policy. We warned the Government where legislation would get them. This is the crazy, fantastic situation into which we get when we have legislation of this kind.
I do not like to say more. I am a loyal member of this party. I was on a local authority for six years as a member of this party, and I never once abstained or voted against my party all the way through. I supported my party all the way through, and always would. But we are being asked to support this policy against the consciences of ourselves as trade unionists. I could never bring myself to support any of this type of legislation. I said that before the Bill was introduced, I have said it right through, and I have never supported legislation of this kind. I have no intention of doing so this evening.

11.23 p.m.

Mr. Iain Macleod: As mover of the Motion I do not need the leave of the House to comment briefly upon it. I wish to invite the Parliamentary Secretary to reply to some points, which I will


briefly run over, which have been put with great force from both sides of the House.
First, on a small point, I do not regard this argument about Reuters as central to the case that I was making. But he was somewhat abrupt with me and asked whether I could not calculate six months. Indeed, I can. The point is that he was talking about the cost-of-living bonus of 6s. a week which was payable from 1st April, which is six months after October. I was talking about the wages structure review, which is what matters.
I have in my hand the staff notice from Reuters dated 8th March, which states that
members of the clerical staff will be receiving increases in their salaries this week, under the company salary structure, which will be back-dated to 1st October, 1966".
It would be helpful if the Parliamentary Secretary were not quite so abrupt on some of these matters and if he did not assume that one did not know what one had looked at.
I pass quickly from that issue to say a few words about the key issues. The first is whether this is or is not discrimination against trade unionists. I am certain that it is. The reason which the Parliamentary Secretary gave was that S.O.G.A.T. in one case deals with a very small minority of all those who could be affected, but it was negotiating by custom for everybody. Any increase which they obtained—this is the merit of trade unionism in this field—would be extended to people who were not trade unionists.
The Parliamentary Secretary says, however, quite rightly, that he can only, on the face of it, make the Order against those whom he knows to be planning to break it, which are the members of S.O.G.A.T. We have taken this point abroad, but this does not alter the fact that the hon. Gentleman is legislating in terms, in the Schedule in particular, about the departments in which S.O.G.A.T. is organised.
The hon. Gentleman can get all the assurances he likes from the companies—of course, they are given accurately, no doubt—but he cannot be aware of individual agreements made with people who are not trade unionists. He will agree

with me that he has no ultimate sanction for those individuals except the ridiculous one of bringing an Order to this House to say that Tom Jones or John Smith should not be given the advance.
That is what the point is about. The hon. Gentleman has the sanctions, and we know it, for the trade union people. The sanctions are in the Act. We all know this. The hon. Gentleman completely missed the point which I, the hon. Member for Salford, West (Mr. Orme) and many others have made. Clearly, this seems to be a matter of discrimination.
The hon. Gentleman should ask the House for leave, which I am sure would be granted, to reply to the points made by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) and emphasised by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). A week ago it was a good enough excuse, perhaps, in response to this sort of point, that the Government's policy had not been clarified. Leaving aside the word "clarified", we had an announcement this afternoon about the next stage. The Parliamentary Secretary now has simply no excuse for not answering in precise terms the point made by my right hon. and learned Friend and I hope that, however briefly he has to do it, he will do so.

11.27 p.m.

Mr. Hattersley: I am sorry if the right hon. Member for Enfield, West (Mr. Iain Macleod) thought that I was terse with him. My intention was to be conciliatory. For a Wednesday evening, this has been a very conciliatory debate. I hope that I will have time to go through the points put by the right hon. Gentleman and I will take them in reverse order, because I am sure that that would reflect the priority which he would give to his questions.
In terms of what happens when the Order expires, the advice which I am given, the advice of counsel available to my Department, is that certainly there will be no question of a man being able to claim back pay for the period which was covered by the Order. I am sure that I do not have to tell either him or the hon. Members who raised the matter of the difficulties with which any judgment must be hedged around which is


dependent on legal advice which is given but untested. The best advice available to us, however, is that back pay certainly could not be claimed in August when the Order expires.
In terms of whether the payment can then immediately go forward, the right hon. Gentleman knows well, because he asked my right hon. Friend the First Secretary several times earlier today, that there has yet to be a statement on powers. Until the statement on powers is made and until that White Paper is published, it would be improper for me—not merely inexpedient or difficult, but improper—to make any judgments about the outcome of cases such as this at the end of the period of severe restraint.
We have promised to continue to discuss the nature and extent of the powers with both the T.U.C. and the C.B.I. I am sure that, on reflection, the right hon. Gentleman does not want me to give ad hoc decisions about how individual orders should be applied or operated after the end of the period of severe restraint until those negotiations and discussions are completed.
I turn now to the point which is certainly the most important and which has caused most furore tonight: that is, the suggestion, despite what I have tried to say, that there is still discrimination against trade unionists. The right hon.

Gentleman is quite wrong to say that to make it essential for individuals, any Tom, Dick or Harry, in the lists included, to stick to the Order if they are not party by implication to the agreement between the union and management, it would be necessary to have a specific order relating to a specific man.

I hope that the right hon. Gentleman will accept my repeated assurance that every Tom, Dick and Harry, as he chooses to call them, whether S.O.G.A.T. members or not, in the departments and the spheres included, is covered by the Order expressly or by implication. There is a sanction against them. The Order applies to them in the way that it applies to the man on the next bench who is a S.O.G.A.T. member.

There is no sanction against the departments which are not included, but those which are not included have not tried to pay an increase in excess of prices and incomes policy. If they were to do that—to take the extreme case, if Reuter's were to do that, which is inconceivable—of course a general Order would be made against them.

It being half-past Eleven o'clock, Mr DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 100 (Statutory Instruments, &amp;c. (procedure)).

The House divided: Ayes 119, Noes 168.

Division No. 300.]
AYES
[11.30 p.m.


Alison, Michael (Barkston Ash)
du Cann, Rt. Hn. Edward
Hornby, Richard


Allason, James (Hemel Hempstead)
Eden, Sir John
Howell, David (Guildford)


Atkins, Humphrey (M't'n &amp; M'd'n)
Elliott, R.W.(N"c'tle-upon-Tyne,N.)
Hunt, John


Awdry, Daniel
Emery, Peter
Irvine, Bryant Godman (Rye)


Baker, W. H. K.
Eyre, Reginald
Johnston, Russell (Inverness)


Batsford, Brian
Fisher, Nigel
Kimball, Marcus


Bennett, Sir Frederic (Torquay)
Fletcher-Cooke, Charles
Kirk, Peter


Berry, Hn. Anthony
Foster, Sir John
Langford-Holt, Sir John


Bessell, Peter
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Legge-Bourke, Sir Harry


Biffen, John
Gibson-Watt, David
Loveys, W. H.


Birch, Rt. Hn. Nigel
Gilmour, Ian (Norfolk, C.)
Lubbock, Eric


Boyd-Carpenter, Rt. Hn. John
Glover, Sir Douglas
Mackenzie, Alasdair(Ross&amp;Crom'ty)


Boyle, Rt. Hn. Sir Edward
Goodhart, Philip
Macleod, Rt. Hn. Iain


Braine, Bernard
Goodhew, Victor
Maxwell-Hyslop, R. J.


Brinton, Sir Tatton
Grant, Anthony
Maydon, Lt.-Cmdr. S. L. C.


Brown, Sir Edward (Bath)
Grant-Ferris, R.
Miscampbell, Norman


Bruce-Gardyne, J.
Gresham Cooke, R.
Monro, Hector


Buck, Antony (Colchester)
Griffiths, Eldon (Bury St. Edmunds)
More, Jasper


Burden, F. A.
Gurden, Harold
Morgan, Geraint (Denbigh)


Campbell, Gordon
Hall, John (Wycombe)
 Neave, Airey


Carlisle, Mark
Hall-Davis, A. G. F.
Noble, Rt. Hn. Michael


Carr, Rt. Hn. Robert
Hastings, Stephen
Onslow, Cranley


Channon, H. P. G.
Hawkins, Paul
Orr-Ewing, Sir Ian


Clegg, Walter
Heald, Rt. Hn. Sir Lionel
Osborn, John (Hallam)


Corfield, F. V.
Heseltine, Michael
Page, Graham (Crosby)


Crawley, Aidan
Higgins, Terence L.
Peel, John


Currie, G. B. H.
Hiley, Joseph
Percival, Ian


d'Avigdor-Goldsmid, Sir Henry
Hill, J. E. B.
Powell, Rt. Hn. J. Enoch


Dean, Paul (Somerset, N.)
Hogg, Rt. Hn. Quintin
Prior, J. M. L.


Digby, Simon Wingfield
Holland, Philip
Pym, Francis


Dodds-Parker, Douglas
Hordern, Peter
Rawlinson, Rt. Hn. Sir Peter




Ridley, Hn. Nicholas




Ridsdale, Julian
Stodart, Anthony
Wilson, Geoffrey (Truro)


Rossi, Hugh (Hornsey)
Taylor, Sir Charles (Eastbourne)
Winstanley, Dr. M. P.


Royle, Anthony
Turton, Rt. Hn. R. H.
Worsley, Marcus


Russell, Sir Ronald
Wainwright, Richard (Colne Valley)
Wylie, N. R.


Scott, Nicholas
Walker, Peter (Worcester)
Younger, Hn. George


Sharples, Richard
Ward, Dame Irene



Shaw, Michael (Sc'b'gh &amp; Whitby)
Weatherill, Bernard
TELLERS FOR THE AYES:


Sinclair, Sir George
Webster, David
Mr. David Mitchell and


Smith, John
Whitelaw, Rt. Hn. William
Mr. Timothy Kitson.


Steel, David (Roxburgh)
Wills, Sir Gerald (Bridgwater)





NOES


Abse, Leo
Gregory, Arnold
Noel-Baker, Francis (Swindon)


Archer, Peter
Grey, Charles (Durham)
Oakes, Gordon


Bagier, Gordon A. T.
Griffiths, David (Rother Valley)
Ogden, Eric


Barnes, Michael
Griffiths, Rt. Hn. James (Llanelly)
Oram, Albert E.


Benn, Rt. Hn. Anthony Wedgwood
Hamling, William
Oswald, Thomas


Bishop, E. S.
Haseldine, Norman
Owen, Dr. David (Plymouth, S'tn)


Blenkinsop, Arthur
Hattersley, Roy
Padley, Walter


Bottomley, Rt. Hn. Arthur
Herbison, Rt. Hn. Margaret
Page, Derek (King's Lynn)


Bowden, Rt. Hn. Herbert
Houghton, Rt. Hn. Douglas
Palmer, Arthur


Boyden, James
Howarth, Robert (Bolton, E.)
Parkyn, Brian (Bedford)


Braddook, Mrs. E. M.
Howell, Denis (Small Heath)
Pavitt, Laurence


Bray, Dr. Jeremy
Howie, W.
Peart, Rt. Hn. Fred


Brooks, Edwin
Hoy, James
Pentland, Norman


Brown,Bob(N'c'tle-upon-Tyne,W)
Huckfield, L.
Prentice, Rt. Hn. R. E.


Brown, R. W. (Shoreditch &amp; F'bury)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Price, Christopher (Perry Barr)


Buchan, Norman
Hughes, Roy (Newport)
Price, Thomas (Westhoughton)


Buchanan, Richard (G'gow, Sp'burn)
Hunter, Adam
Price, William (Rugby)


Cant, R. B.
Hynd, John
Probert, Arthur


Chapman, Donald
Irvine, A. J. (Edge Hill)
Rankin, John


Coe, Denis
Jackson, Colin (B'h'se &amp; Spenb'gh)
Rees, Merlyn


Coleman, Donald
Janner, Sir Barnett
Reynolds, G. W.


Concannon, J. D.
Jay, Rt. Hn. Douglas
Richard, Ivor


Craddock, George (Bradford, S.)
Jenkins, Rt. Hn. Roy (Stechford)
Roberts, Gwilym (Bedfordshire, S.)


Crosland, Rt. Hn. Anthony
Jones, Dan (Burnley)
Robinson,Rt.Hn.Kenneth(St.P'c'as)


Crossman, Rt. Hn. Richard
Jones. J. Idwal (Wrexham)
Robinson, W. 0. J. (Walth'stow, E.)


Dalyell, Tam
Jones, T. A. (Rhondda West)
Rodgers, William (Stockton)


Davidson, Arthur (Accrington)
Judd, Frank
Rose, Paul


Davies, Dr. Ernest (Stretford)
Kelley, Richard
Ross, Rt. Hn. William


Davies, G. Elfed (Rhondda, E.)
Lawson, George
Shaw, Arnold (Ilford, s.)


Davies, Ednyfed Hudson (Conway)
Lee, Rt. Hn. Frederick (Newton)
Shore, Peter (Stepney)


Davies, Harold (Leek)
Lever, L. M. (Ardwick)
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)


Davies, Ifor (Gower)
Lewis, Ron (Carlisle)
Silkin, Rt. Hn. John (Deptford)


Davies, Robert (Cambridge)
Luard, Evan
Skeffington, Arthur


Delargy, Hugh
Lyon, Alexander W. (York)
Slater, Joseph


Dewar, Donald
Lyons, Edward (Bradford, E.)
stonehouse, John


Doig, Peter
Mabon, Dr. J. Dickson
Swingler, Stephen


Donnelly, Desmond
McBride, Neil
Taverne, Dick


Dunnett, Jack
MacColl, James
Tinn, James


Dunwoody, Mrs. Gwyneth (Exeter)
MacDermot, Niall
Urwin, T. W.


Eadie, Alex
Macdonald, A. H.
Varley, Eric G.


Edwards, William (Merioneth)
McKay, Mrs. Margaret
Wainwright, Edwin (Dearne Valley)


English, Michael
Mackenzie, Gregor (Rutherglen)
Walden, Brian (All Saints)


Ennals, David
Mackie, John
Walker, Harold (Doncaster)


Ensor, David
Mackintosh, John P.
Watkins, David (Consett)


Evans, Ioan L. (Birm'h'm, Yardley)
Maclennan, Robert
Wellbeloved, James


Faulds, Andrew
Mallalieu, E. L. (Brigg)
Wells, William (Waisall, N.)


Fernyhough, E.
Mallalieu,J.P.W.(Huddersfield,E.)
Whitaker, Ben


Fitch, Alan (Wigan)
Marquand, David
White, Mrs. Eirene


Fletcher, Raymond (Ilkeston)
Mellish, Robert
Whitlock, William


Fletcher, Ted (Darlington)
Millan, Bruce
Williams, Alan Lee (Hornchurch)


Foot, Sir Dingle (Ipswich)
Milne, Edward (Blyth)
Williams, Mrs. Shirley (Hitchin)


Forrester, John
Morgan, Elystan (Cardiganshire)
Willis, George (Edinburgh, E.)


Fowler, Gerry
Morris, Alfred (Wythenshawe)
Wilson, William (Coventry, S.)


Fraser, John (Norwood)
Morris, Charles R. (Openshaw)



Freeson, Reginald
Morris, John (Aberavon)
TELLERS FOR THE NOES:

Gardner, Tony
Moyle, Roland




Mulley, Rt. Hn. Frederick
Mr. Walter Harrison and


Greenwood, Rt. Hn. Anthony
Murray, Albert
Mr. Joseph Harper.

Orders of the Day — PLANNING (HOCKLEY)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bishop.]

11.40 p.m.

Mr. Bernard Braine: I wish to draw the attention of the House to a situation which is causing quite unnecessary hardship and distress to a number of my constituents who live on the fringe of the village of Hockley, in Essex.
The hardship in this case arises from an arbitrary planning decision taken over two years ago to include a residential area of some 32 acres in the proposed "green belt", and also, I regret to say, from the failure of the Minister, at least up till now, to confirm or reject that decision, despite the fact that he has been made aware of the distress which it has caused.
Even if this were a case where it could be argued that private interests should be made to yield to the public good, there would be grounds for protesting against the delay and uncertainty caused. But, as I hope to show, the contrary is the case. There is no pressing public need which justifies the treatment meted out to my unfortunate constituents. Since this is a matter which could be resolved by the Minister administratively, I am making a plea to him to make a decision without further delay and to end the two years of misery and uncertainty which my constituents have had to endure.
Briefly, the facts are these. In March, 1965, the Essex County Council submitted the revised county development plan for the Minister's approval. The plan included a proposal to designate as public open space an area of 32 acres on the east side of Plumberow Avenue, about a mile from the centre of Hockley. Within the area at that time, there were about 100 people living in 30 or more houses and bungalows, most of which were built in the late 'thirties or since the war.
As I have seen for myself, the majority are pleasant, well-equipped, brick-built dwellings with well-kept gardens. Ironically, the owners of 10 of these dwellings have had planning permission in

recent years to make improvements and extensions. It seems that they have wasted their time and money. If they wish to sell, there are no buyers except, perhaps, the local authority. If they wish to remain, they are faced with the prospect of compulsory purchase at some unspecified date in the future.
Thus, if this ludicrous proposal is approved by the Minister, perfectly sound dwellings will have to be acquired at considerable public expense by the local council and then demolished, at a time when that authority already has a long waiting list for accommodation and there is a national shortage of houses. Already because one family has emigrated, a perfectly sound house has been bought by the council and the roof ripped off to prevent anyone living there. This is planning gone mad.
As any sane person would expect, the proposal aroused intense local opposition, and not merely from the residents directly affected. The idea of providing additional open space for the people of Hockley was not disputed by the residents; it was welcomed. But, as deputations pointed out to me, a far more suitable area existed to the west of the village comparable in size, unencumbered by houses, unsuitable for agriculture, and much nearer to the bulk of the residents who could be expected to use it.
A public local inquiry to hear objections to the county development plan as a whole opened in February, 1966. But it was not until April that objections to the Hockley proposal were heard, over a year after the blow had fallen on the residents.
In January, 1966, I wrote to the Parliamentary Secretary at the Ministry of Housing and Local Government in these terms:
I trust that the Minister's attention will be specially drawn to this nonsensical proposal which has caused serious anxiety to the householders concerned, and will cause them much inconvenience and loss if it is not quashed, as well as wasting the time of your Inspector, myself and numerous officials. One can only assume that the proposal originated from some 'planner' drawing lines on a map without having visited the area or having considered alternatives in the locality for the provision of open space which would not inflict injury on existing householders. Whether this was so or not I would argue that it is proposals of this kind, involving heavy and unnecessary expenditure, which bring planning into disrepute.


I was assured by the Parliamentary Secretary on 4th February that
… careful consideration will be given to all the representations before a decision is reached.
Although the objections were heard in April, the months slipped by without further word, and in August I was obliged to write again to the Parliamentary Secretary, saying:
Surely by now on a small matter of this kind of decision could have been reached? The constituents concerned cannot sell their properties and feel that they have been treated very badly indeed by the inclusion of their area as one for open space. As I think I made clear at an earlier stage I entirely agree with them. I would be glad if you could let me know how the matter stands …
The reply this time came from the Parliamentary Secretary to the Ministry of Land and Natural Resources, saying flatly that it would not be possible to consider this particular problem in isolation. Any decision would have to be properly related to the review proposals as a whole. That was rubbish. Any objective look at the problem would show that a decision would be taken on the merits of this particular case, if the will to do so existed.
The Parliamentary Secretary ended his letter by blandly informing me:
If any of the owners whose properties are affected by the allocation are suffering hardship because of planning blight, it is open to them to ask the council to buy their property on these grounds.
That letter was dated the 7th September, 1966. The blow had first fallen on the unfortunate residents in March, 1965, and thus we were getting towards the end of 1966, with no decision in sight. During that period the residents found that they could not sell their properties nor could they develop them. Some of them were ill with worry.
Therefore, on 19th October, 1966, I wrote again, as follows:
It is really monstrous to suggest that if the unfortunate people concerned are suffering hardship they should get out of their homes and ask the Council to buy them, a course which would involve heavy public expenditure at a time when your Department has had to curtail a wide range of necessary public services. In any event, this suggestion pre-judges the Minister's decision on the matter and I have already told you that this particular proposal has no merit. In my view it is reasonable to suppose that the Minister may very well decide not to authorise such a waste of public money.

Is it not possible, therefore … to look at the matter separately and urgently in order that these people can be put out of the misery they have suffered for some considerable time and which our ponderous planning procedures seem likely to condemn them to endure for many months to come?
I was told, in reply, that there were difficulties:
I would like to be able to say that an early decision could be given on a specific question but I know you will appreciate the difficulties. The planning of a whole area necessitates the careful provision for all the various land uses; to change one proposal inevitably has an effect on another. For example, provision of public open space in a district will depend to a large extent on the total needs of an area … I can assure you, however, that he will issue decisions on all the review proposals as soon as possible.
Let the House ponder those words—"as soon as possible".
Nothing has happened since, except that I have had heartbreaking letters from residents which show that, if anything, I have underestimated the harm that this wrongful decision and the Minister's refusal to act has done. I want now to read some brief extracts from those letters. The first says:
Two years ago the open space was proposed, since then we have been living in a state of terrible anxiety.
I have spent most of my working life building homes for others. We would like to know now whether this is our home or not.
P.S. We cannot even sell the place to relieve our anxieties.
The next letter reads:
My property is a modern brick-built bungalow and, by many of today's standards, spacious.
There follow details—I have seen the house. The letter then continues:
A large amount of the work necessary to bring the place up to its present standard was carried out as a result of planning permission granted to me by the very authorities who are now requesting permission to nullify all the time, money, and labour involved by demolition if and when they can.
I would also like to bring to the notice of whosoever has to give a decision on the proposed plan the effect on people living under a shadow, not knowing how the education of their children is going to be affected and in my own case, being a Civil Servant who is considered mobile, especially on promotion, whether or not I would have either to resign, thus losing hard-won pension rights, or perhaps go into lodgings away from my family. An early decision would be beneficial to all concerned and anything you can do to expedite this would be greatly appreciated.


The third letter states:
My property being 'blighted', prevents me from selling on the open market. This has already meant the loss of a better position with my company in South Wales. Having decided to disrupt my life by their insane proposal to 'condemn' this soundly constructed post-war property, this lack of decision seems to be the salt that is rubbed into the wound. Should I plan for the future here? I am not growing younger.
There follow heartbreaking references to the home that this man and his wife have built up.
The decision of the planners in this case was wrong from the very beginning, and it was taken without regard to local circumstances. Since then my constituents have endured two years blighting of their hopes, with the Minister declining to intervene. And to what end? To meet some great community need for land so that others could be housed or that roads could be built, or a fine park established?
No. The only development so far, apart from the misery caused to innocent people, is that the local ratepayers have had to buy one house, presumably with Ministry consent, so that it can be rendered uninhabitable. Will this bureaucratic stupidity continue? It is a scandalous state of affairs, and my purpose in raising it tonight is to persuade the Minster to put an end to the whole matter by making a simple decision to reject the proposal, and to reject it now.

11.52 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The hon. Member for Essex, South-East (Mr. Braine) has put his constituents' case forcibly and with reasonable accuracy, and they will be grateful to him for having taken this matter up for them.
But he was a little unfair to my right hon. Friend on his part in the matter, as I shall try to explain. The hon. Gentleman starts from the assumption that this is a bad decision by the planning authority. He used phrases like "ludicrous proposals" "nonsensical idea" and "arbitrary planning", and so on. I want to make clear that the planning authority for these purposes is the Essex County Council—not a bureaucrat, not a back room planner and certainly not my right hon. Friend.
The planning authority responsible for preparing amendments to the development

plan is the county council and under the law it has prepared its plan for the whole County of Essex. As the hon. Gentleman said, it submitted it in March, 1965. It is a very large and comprehensive plan for a very complicated and difficult county which has many problems—of expanding population, of varieties of terrain, and so on, and varied qualities in housing.
The plan led to 1,300 objections being lodged. There were 20 objections to the particular proposal that the hon. Gentleman mentioned. An inquiry was held a year ago, starting in February, 1966. It was not a 24-hour working day inquiry, with a report written over the week-end; the whole inquiry took five months, ending in July.
After the inquiry had been completed and the tremendous amount of material assembled, the inspector had to prepare his report. After his report has been prepared the decision must be not only on this particular scheme, but on all the other matters concerned in the inquiry.
When the hon. Gentleman says that what my right hon. Friend should have done was simply to say, "This is a lot of tripe. We will have this out and settle it straight away", he is really saying that my right hon. Friend should pre-judge the considered recommendation of the planning authority, which he has no legal or moral right to do. It is his duty under the law to consider all the objections, and to consider the proposals of the planning authority, and, having considered them all, and having had regard to the inquiry, to make his decision.
As the hon. Gentleman knows, these matters are supervised not only by the High Court, which can deal very firmly with any deviations from the law, but also by the Council on Tribunals, which watches over procedure in these matters with great care. My right hon. Friend has to look at all these matters together before coming to a final conclusion, and letters which the hon. Gentleman quoted set the position up as it is. It is true that it is a long business, and it would be wrong to try to gloss over this and pretend that it is something which can be done quickly. It will take quite a time to look into all these matters.
The hon. Gentleman might go on to say that, accepting that we cannot deal


with this by some sort of summary rejection, why not now pick out the parts of it which affect Hockley and deal with these in isolation from the others. There are many difficulties about this. It could be done. I want to make it clear to the hon. Gentleman that I am not sheltering behind the law and saying that it could not be done. It could be done under the law, but it would be difficult to do in practice.
In the first place, it would mean selecting areas in which everybody feels that his own problem is very urgent and should be dealt with. It would be very difficult to say to one part of the county, "This is urgent and must be dealt with quickly", and to another part that something can wait. Difficulties of this kind do arise.
The other difficulty is that of defining the area to be taken out. One cannot tell whether the county is being reasonable about the allocation of open spaces unless one knows what the size of the population is going to be, where it is to be situated, and what alternative spaces will be available. The difficulty about planning is that if we are to do it properly and adequately we must have a comprehensive view of an area. This is the whole point of having a development plan.
The position is difficult for people who suffer from what is generally known as planning blight. I do not hide that. It is worrying for those concerned. I am not quite clear what the problem is, because the hon. Gentleman says, "It is such a fantastic idea that you could not even for a moment let the planning authority acquire the property". We have to look at the proposals. There are only two things that we can really do about it. We can allow the planning authority to acquire where there is blight and give loan sanctions, or we can leave the position as it is.
The people who are not moving, and who do not intend to move, may find the situation worrying, but they are not discommoded to the extent that the hon. Gentleman suggests. It is fairly clear from the plans that these are proposals which will not happen tomorrow. They are in the second phase of the plan, that is for 1972 to 1981, so it is not an immediate disaster which is going to

happen, and therefore people who are wondering whether they can take a job tomorrow are getting their perspective a little out of focus.
It is true that people who want to move are in a difficulty, and this is the point in giving permission to the planning authority to acquire if the property is offered to it.

Mr. Braine: Is the hon. Gentleman saying that in the present economic circumstances, with an acute housing shortage, not only in my constituency, but in other parts of the country, loan consent will be given to the local authority to acquire houses which in some cases are worth more than £4,000 if the owner wants to emigrate or move somewhere else in the country, and that the authority will then be able to rip off the roofs of these houses? Is he saying that that sort of thing can be justified? Surely the obvious thing to do is to treat this as an exceptional case, and I hope that the hon. Gentleman will say that he will.

Mr. MacColl: What happens to the houses, whether they can be occupied temporarily or not occupied, is for the planning authority to say. The hon. Gentleman must not put the direct blame on my right hon. Friend. It is his county council and the electors who have voted for it who have the direct responsibility, not my right hon. Friend. We do not like giving loan sanction to planning authorities to acquire land for blight. We do not like acquisition in advance of requirements, because it has inflationary effects, but when we are faced with severe hardship it is only reasonable that we should give permission for the planning authority to help in this way.
The hon. Member may well say that this is a very unfair and difficult procedure and may suggest that it leads to many hardships. You would frown on me, Mr. Deputy Speaker, if I launched into any general anticipation of legislation on the matter. I will only say that because of these difficulties with development plans, the time taken to amend them, and many other major planning problems, the planning advisory croup was set up.
The hon. Member will be familiar with the P.A.G. report and my right hon.


Friend and his colleagues are considering what can be done to bring that into operation. There are difficulties about the working of this machinery, because plans are very detailed and the machinery to deal with them is slow and people are caused worry and concern.
In the meantime, all my right hon. Friend can do, governed by his legal responsibilities, is to hold the balance fairly as between the planning authority, which thinks that this is the right solution for Essex, and the individual objectors with whom the hon. Gentleman agrees who think that it is not. There is a clear dispute. It is quite wrong to regard this as a completely arbitrary and unreal situation. It is a clear difference of opinion between two sincere collections of people who have different views about the future of this area. My right hon. Friend's duty is to hold the balance evenly between them and to do his best to help when he can to deal with hardship.

Mr. Braine: I hope that this is not the last word on the matter, because it

is not just a difference between two sincere groups of people. It is a difference between planners looking at a map and drawing a line and people whose homes and futures are at stake. The hon. Gentleman spoke of a planning blight. It would not be any exaggeration to say that the delay over the last two years has been a blight upon the hopes of these people. Will the hon. Gentleman say whether he will consider treating this as an exceptional case because of the human factors involved?

Mr. MacColl: I would not shut my mind to the possibility of doing anything if it could be done, and I have said that I think that it could be done within the law. However, there are great practical difficulties and it would be unreal to pretend that they could be overcome. We shall certainly consider the situation to see whether anything can be done.

Question put and agreed to.

Adjourned accordingly at five minutes past Twelve o'clock.